Shopping Centres & Retailers Stay Active Despite Tough Year

• 10 September 2021
• Local News
• 1907 Views

By Eric Wong Chon Lap

Retail businesses continue to be stressed and are finding it difficult to sustain with the weakening of spending power. It is estimated this current outbreak will have a significant impact on the retail market in the following quarters.

As the number of daily COVID-19 cases in Cambodia increased to close to a thousand new cases per day, shopping centres implemented more intensive measures to combat the current wave of the outbreak. Many retail landlords must now consider cautiously extending their rental discounts to mitigate the risk of vacancies. Some landlords and retailers have called off or postponed their investment plans and focused on cost-saving measures by closing some of their existing, less profitable stores permanently and changing their business models.

Some landlords are also taking this opportunity to rejuvenate their tenant composition. For example, AEON Mall (Cambodia) has brought in new retailers including Calvin Klein, Champion and Michael Kors etc. to their AEON Mall 1 shopping centre. The company has also announced the upscaling of AEON Mall 1, by adding 27,000 square metres of space, and this will bring the total retail footprint to 162,000 square metres once the expansion is completed. This upgrading is expected to boost the number of visitors to the existing shopping centre. (Read more)

Besides tenants operating in the shopping centres, major retail brands have not given up and continue trying by launching stronger and more frequent promotional campaigns to increase sales and to stimulate customer spending.

Food and beverage fared better, reporting minimal contraction in business. While Cambodia has eased curbs, cinemas continue to remain shut while restaurants and other non-essential stores, which include apparel, appliances, beauty, and jewellery stores among others, have remained open. Supermarkets and hypermarkets are still allowed to operate. Most of the restaurants have remained open, but there are still some restaurants only serving take-away or delivery orders. At the same time, some F&B retailers continued their expansion plans, despite smaller volumes.

Many retailers will continue to struggle to generate back to their pre-crisis revenue. Modern retailers have adopted some online capability but not in a major way. For example, online businesses of grocery/supermarket retailers will mostly be conducted through third-party apps that have more established logistic and delivery platforms, which can cater to a large volume of deliveries. Still, online sales accounted for just a small percentage of total sales for these retailers. It is highly likely that retailers are still expected to face difficult times in 2021. Nonetheless, the loss can be made up due to an acceleration in the vaccine rollout in Cambodia.

—
Eric Wong has extensive experience in the field of property consulting and development sectors, primarily within the emerging markets of Southeast Asia. From the property consulting perspective, he has lead market research assignments inclusive of providing descriptive, exploratory market research and analysis reports within the office, residential, hotel, and retail segments in both quantitative and qualitative methods to determine suitable development types, scale and product mix, and address property-related matters from project positioning to absorption rates, phasing and pricing and marketing strategies etc.

• Analysis
• Business and Market