Stable attendance and growing turnover
As our results from this year show, shopping centres have remained an attractive sales channel and source of turnover for retail companies despite lockdowns, restrictions being introduced and the need to operate under high sanitary rigour. The stable footfall and at the same time high turnover in the months without lockdowns clearly indicate that shopping centres are still an important shopping destination for Poles - customers are keen to visit them and make purchases that result in higher bills. In the months without lockdowns (February, May-July 2021), tenant turnover in our facilities was on average 4% higher compared to 2019 levels. For May and June this year, they were at 112% and 98% of the 2019 result, respectively, with visitation rates of 78% and 80%. For July 2021, turnover was at 102% of that of two years ago, with visitation reaching 84%. The trend of Poles returning to stationary shopping is also confirmed by the e-commerce penetration rate, which fell from 9.8% in the first month of this year to 7.4% in July 2021 following the reopening of shops.
The robust operational performance is supported by Poland's strong and resilient economy, which is rapidly returning to pre-pandemic growth levels. Even more improvement is expected in the coming months, with GDP growth forecast at 4.9% in 2021 and 5.6% in 2022. Low unemployment and rising wages further stimulate consumer spending, putting Poland ahead of the EU average retail sales growth rate.
Tomasz Trzósło
President of EPP
The "post-pandemic" customer - a new challenge
The times ahead will be challenging for the retail industry and for shopping facilities. In the face of changing consumer expectations, the development of e-commerce and the transformation of traditional retail, shopping centres and chains must take special care to maintain the continued interest of visitors. It will be important to strengthen the synergies between shopping experiences across channels and to build relationships and bonds with customers.
On the one hand, consumers today have precise shopping goals, resulting in higher conversions than before the pandemic, and on the other, they expect more from a shopping centre than just a place to shop. In addition to shopping experiences, they also want experiences, emotions - a safe space to spend leisure time and form social relationships. This is why the role of entertainment and catering in shopping centres will become increasingly important as we move away from covid restrictions. Particularly after long periods of economic closure, we are even thirsty for a return to normality, and thus to enjoy the entertainment offer or to spend time with loved ones outside, over a coffee or a meal.
Traditional retail is undergoing a transformation before our eyes. In the face of the pandemic online revolution, shopping centres must respond to the new trends by naturally combining both worlds - online and offline - providing customers with the best possible experience and service across all channels. This includes easy and quick access to the full range of products and the opportunity to get to know them before entering the shop, high-quality in-store service, convenient payment, easy exchange or return, technological innovations to facilitate decision-making or sizing, or the ability to have the product the customer is looking for delivered from another location.
The future of shopping centres
Observing how the industry is rebuilding its results with each passing month, I look to the future with moderate optimism. The latest operating results show the continuing interest of customers in shopping in our centres, which generates demand for space from tenants and proves the attractiveness of EPP's assets and the trust of brands to the Polish retail market. Since the beginning of the year, we have signed over 200 leases for nearly 70 thousand square meters in EPP facilities. Often, our centres have been and continue to be chosen by new concepts as the location for their debuts in a given region.
It is difficult to make bold predictions about the development of the industry today. The common denominator of facilities which will strengthen their position will be the ability to attract customers with a unique retail and entertainment offer in an integrated omnichannel environment, which makes it possible to strengthen the bond between the customer and the shopping centre even after they have physically left it, thanks to virtual tools which actually expand the shopping space. This "going beyond the centre" also means actively engaging in activities for the benefit of local communities and conducting responsible business, especially in the aspect of reducing environmental impact.
What the entire industry needs today and in the coming weeks, and this is what I wish for it, is peace of mind and the ability to function without disruption and further restrictions in order to steadily increase turnover and improve the mood in the sector.
