The Los Angeles Times this morning has a piece about what the retail world will look like after the Covid-19 coronavirus pandemic has passed.
"Although analysts predict a rebound by the end of the year, the new retail landscape may look different from the old one, as mandated closures knock out weak malls and merchants," the story says. "Online shopping is likely to permanently grab an even bigger share of buyers’ money, particularly for groceries because house-bound consumers grew comfortable getting their food picked out by someone else and delivered."
Meanwhile, the Times writes, "the outlook is terrible for businesses closed by the pandemic. Landlords face a wave of missed rent payments from tenants who were ordered by public officials to lock their doors to slow the rate of infection."
Industry observers expect a number of retailers and restaurants "to invoke provisions in their leases including 'force majeure,' contract language that excuses them from meeting their financial obligations because of extraordinary circumstances beyond their control. Current circumstances are decidedly unusual for a majority of stores, restaurants and other businesses such as gyms."
Some landlords are being understanding - to a point. "The largest commercial landlord in Orange County, Irvine Co., told tenants in an email Sunday that they could delay making rent payments for three months but must eventually pay the money without interest over a 12-month period starting next year. Many retailers in Irvine and elsewhere want more than a rent delay. They want to skip rent for the time they can’t operate." And Rick Caruso, one of Southern California’s biggest independent shopping center owners, tells the Times that "he is still figuring out how to best help his tenants, the majority of whom have been closed for several days." Caruso says he would like figure out a way to equitably share the pain.
- KC's View:
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It is ironic. People - including me - used to toss around the phrase "new normal" when referring to some of the retailing and shopping changes that we've seen over the past few years. Little did we realize that a virus could creep into the business and the culture that potentially changes everything.
Force majeure, indeed … in every sense of the phrase.
