Relevant Measures for the Retail Sector During COVID-19

• 16 November 2021
• Local News
• 1194 Views

By Eric Wong Chon Lap

The COVID-19 pandemic has forced several changes in the retail market, to the point that reinvention and reformatting of retail operations became the key to survival for retailers, in the period where restrictions are everywhere. It has also continued to create an impact on the average occupancy rate of Phnom Penh’s retail spaces, as it falls to the lowest level in years. The current spread of the Delta strain is much more intense than the first wave back in 2020, which makes the situation worse for retailers.

For retail businesses, easing restrictions and adjusting measures were necessary to revive their business. In Phnom Penh, authorities asked business operators to ensure their service staff are fully vaccinated, and regularly tested with antigen kits, some retail stores also required their customers to show proof of vaccination and negative tests. As a result, pedestrian traffic at shopping malls has dropped, resulting in the closure of some small or lesser-known retail outlets.

The current wave of the pandemic from February 2021 created many new clusters in Phnom Penh and other provinces. The number of daily cases forced people to stay home, and order food and products via online channels. Local retail operators deployed online marketing through Facebook or Tiktok, and offered home delivery services to support customers, and help tenants boost their sales. On the other hand, the financial struggle for tenants because of the prolonged impact of the COVID-19 outbreak has caused retail operators to waive rental fees for the hardest-hit tenants, especially tenants which have had to remain closed, including cinemas, gaming centers, and fitness centers – these businesses are required to suspend all activities that would involve gatherings of large numbers of people.

In a highly competitive retail environment, retail operators and retailers have to introduce new retail concepts and shopping experiences and create distinctive selling points. Following the current lockdown, the opening of new retail developments in Phnom Penh is likely to be delayed until the second half of 2022.

Despite the number of cases in Cambodia being relatively low as compared to Thailand or Vietnam, and so far none of the areas in Phnom Penh are listed as a high-risk zone, the situation is still worrying. There is a possibility that people could have contracted the virus from others who were quarantined at home, or people traveling to the provinces.

It is expected that an effective and timely vaccination program in Cambodia will help ease pressure on businesses as well as retail market conditions. However, the retail sector may take longer than expected to recover to a normal level, with full recovery is likely by the middle of 2023.

—
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