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Covid-19 Impact & Recovery Index

The Covid-19 Impact & Recovery Index ranks all shopping areas in Belgium and the Netherlands on the impact of Covid-19 and the subsequently anticipated economic recession.  Not every industry, every type of retail area or every region is affected in the same way. The Covid-19 Impact Index can capture these differences. By recalculating this with intervals in between, it will also provide insight into the chances of recovery.

What factors define the Covid-19 Impact & Recovery Index?

For each shopping area, key figures that have an influence on the resilience have been incorporated:

veerkracht herstel corona winkelgebieden

  1. Start situation of the shopping area
  2. Impact of Covid-19
  3. Internet sensitivity
  4. Impact of a recession
  5. Reliance on travel and office staff
  6. Type of catchment area
  7. Tourism
  8. Local infection rate Covid-19
  9. Temporary closures due to Covid-19

Starting situation of a shopping area

The starting situation of a shopping area – the current state of the shopping area – also tells us something about how sensitive this shopping area will be to the consequences of Covid-19.  That is why the following three key figures are taken into account:


1. Vacancy rate
2. Retail Risk Index
3. The trend of number of retail outlets in the shopping area in the period 2015 – 2020 (rising – equal – declining)

Impact of Covid-19

coronaEvery sector is given a score indicating the extent to which it is affected by changing purchasing behavior, or by the government’s Covid-19 restriction. For example: DIY is doing very well because people are at home more often. However, the catering industry is having a hard time due to the 1,5-meter regulations and the temporary closure.

Internet sensitivity

internetgevoeligheid

Each industry receives a score that indicates the extent to which this industry is affected by e-commerce. Shopping areas with many internet sensitive retail outlets will have a harder time than those with less Internet sensitive industries.

Example: For bakeries the internet sensitivity is very low and for fashion it is very high. Thus, even though during the Covid-19 period people started to buy more via the internet, they still went to the bakery. For the fashion industry, the question is to what extent people will return to the physical stores or if they will continue to shop online.

 Impact of a recession

recessiegevoeligSome sectors are more vulnerable to economic recession than others.

Example: hotels are very vulnerable to recession, while supermarkets are much less so. The sector composition of a shopping area determines the recovery capacity .

 

Reliance on travel and work locations

werk en ov

Covid-19 has stimulated working from home, and many employees do not return to the office completely.

Shopping areas with many surrounding work locations and/or transportation hubs will suffer more than other shopping areas.

Type of catchment area

verzorgingsgebiedDue to Covid-19, people are more likely to avoid public transportation, and shop close to home. Shopping areas with a local focus, which are easily accessible by car and/or bike, will do better than shopping areas with a large catchment area. These areas often rely more on public transport for the influx of customers.

 

Reliance on (international) tourism

toerisme gevoeligheid

Shopping areas that are heavily dependent on international tourism will experience difficulties due to tourists staying away in the coming years. The extent to which national tourists fill this gap, varies from region to region.

Locale infection rate Covid-19

Residents of areas with a high infection rate tend to be more cautious in their shopping behavior and/or frequency than residents of less affected areas. These residents will shop less often, and when they do shop they will limit themselves more to solely necessary purchases.

Temporary closures due to Covid-19

tijdelijke leegstand coronaThose retailers who had to close their doors temporarily, whether mandatory or not, were affected more than retailers who remained open. Some sectors were hit harder than others. We also saw that retail chains were more often subject to temporary closure than independent retailers.

 

Insights per shopping area

The Covid-19 Impact & Recovery Index not only provides a summary index per shopping area, but also shows the impact per partial indicator. Looking at the individual factors gives you the opportunity to understand what influences the resilience of the shopping area. Locatus will periodically reassess the Covid-19 Impact & Recovery Index. By comparing the various benchmarks, you will gain insight into the resilience of the shopping areas.

Do you want to know how where you stand? Call us for an appointment. We can of course make an appointment via Teams, but we will also be happy to come and visit you.

 

Gerard Zandbergen

Gerard Zandbergen is CEO of Locatus and frequently brainstorms with players on the retail market about the chances for the future. Locatus’ goal is to clarify the retail market, so that her clients have a candid overview of their risks and opportunities. Over 20 years of information forms the basis for this process.