GarryP

Having just been to the shops, I'm wondering about retail and can it recover.

As lots of news stories have pointed out, retail has been hit hard by covid19 with many of those effectively now unemployed having worked in retail, and wandering around the shops you can discern some key factors :

• Most shops are closed, even though they aren't specifically bared from trading. They chose to close, and they are going to need to chose to open.
• People are back at at least 80% of their former strength and aren't giving distancing rules, or any such, the time of day - they are basically the same as they ever were.
• Mucking about with queuing to get in to shops just makes things worse, as does the fact that only a few shops are open, so everyone is compressed into those few shops.

Given that, I'm wondering what minimum standards (from the shops) are going to be required to allow retail to recover.

• I think the distancing regulations etc. are going to need to be cancelled - nobody really has the time to put any effort into that and I don't think most will open till they have gone.
• Personal services shops are going to have to be allowed to open too. In themselves they don't matter, but the other shops need the foot traffic.
• The rent that will be owing is going to have to be written off. As it is I'm seeing shops that aren't just closed, but have been stripped, they aren't coming back. And if the landlords come looking for back rent that owners don't have, they will kill any recovery stone dead. They need to take a haircut. And they are going to need to be forced to do so.

Given the above, I can foresee a big tussle. Governments will try and keep onerous regulations for far too long, which will keep retail closed and the economy in the gutter. The longer it goes on, the less retail comes back, which means they really don't have long to realise what they have to do before they have a depression on their hands. They are also going to need to be harder on the landlords to allow a recovery. Customers aren't the issue, they are already over it.

Australia has historically been poor at online, and Auspost being even worse during this prime opportunity doesn't make it any better. However I can see a replacement retail model that marries online and local that could replace retail shops if this goes on much longer - and food services have had to go that way already so they are tasting the advantages. Not sure that it will require the same people though, or the same number of people.

Upshot is, I don't think it's going to come back as we knew it unless those regulation go within the next 2-4 weeks.

Beoz

Interesting questions.

I think you may be right in something that marries online and retail.

Retailers have had to become creative in recent weeks. Food for example. Many food retailers have had to find other ways of making ends meet as their restaurant market has shut down. They have had to start selling to the public through their warehouses or online.

This even extends the question to office space. Companies now realise they can function with staff working at home. In an effort to reduce floor space they are letting will they ask staff to work at home 1 or 2 days a week, not hold a permanent desk but hot desk instead.

Should be an interesting new world on the other side

GarryP

Auspost just seem incapable of reaching the bar, so you can't do normal online. However you can duplicate in each city and treat each as a city state with same day delivery (order by three, evening delivery for free) via local services.

And when you order ingredients online, the farms can cut the middleman out if they want. I already know of someone who gets meat delivered from the farm in bulk, frozen, regularly. It's optimising that last mile that's key - and automated vehicles are still progressing...

More than that, the office becomes focused on a collaboration space, all about the touchy feely, not the desks or meetings. I have to admit I now prefer online telephone-only meetings - since I can do other stuff in the background and just listen out if anyone says anything interesting. The only reason for a physical meeting is when you have to push them.

Retail was already moving towards 'personal services' focus and supermarkets, I'm thinking that many will not reopen if they have the time to think about it and do the numbers.

And then there's schools.Flipped classroom, video lessons, and streaming that reaches across the state, rather than throwing all the kids into the same mixed ability class.

Beoz

The posh butcher in the Westfield near us has gone bust, yet the not so posh butcher on the high street has a queue out the door. Someone didn't adapt to price.

The online deliverer meat option I use has gone from killing 2 cows a week to 7. He doesn't use Oz post but instead has drivers and the meat is fantastic.

Wholesalers opening their doors to the public.

It's a new world of retail.

Yep. and business travel. Why spend $1000 on a 3 day trip from Sydney to Melbourne when you can use Teams or Zoom. It took this for business to realise this.

I suspect we may see a shift in CBD commercial space. I don't think the CBD office space will empty out, it will just come down in price and be filled by those businesses who want the cheaper rent outside the city centres. We may find those outer lying offices feel the pinch. One thing is for certain, big business will want to reduce that floor space rent.

Hmmm. Interesting. That will require more time and resourcing. I doubt the appetite is there for the education system to adopt this, even though it's definitely possible.

GarryP

There IS a difference between being there and being online - and online certainly has a long way to go - but I can see this being another thing that hits the airlines. Plus, of course, there's the fact that 2 hours of meetings online don't take up your entire day.
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I've been wondering if it might get taken out of their hands.

The reality is most teachers aren't great at teaching, and they, and schools, end up being glorified nannies for people to dump their kids on whilst at work. You could revolutionise it and making the lesson virtual (which is what they have had to start doing) would be an enabler of that. You are decoupling the supposed meat of schools from the physical entity.

And schools are a big expense....

Beoz

I wouldn't like to have a vested interest in an airline moving forward.
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The nonsense about schools being a nanny centre is teachers union waffle. Load of rubbish.

Now there is more to schools than learning Maths and English. The social interaction part of it is extremely important. Obviously we all need to learn how to be social in later life but just the mere fact of preventing a child from interacting with other children of the own age is terribly mentally crippling. On top of that sports and fitness is with peers is tremendously important. Then throw in all the extra activities and ethoses private schools provide, rolling a school under a bus just because you think Its just about Maths and English is very dangerous.

GarryP

The social part is part of the nanny centre part. As I say, what they are doing now is decoupling the factual learning from the nanny part - which opens up options going forward.

Beoz

Teachers, eye contact, body language, physical interaction, peer influence, teacher influence, are all part of a day of learning at school.

What you are talking about is extra tutoring. Sure that can be done online. Absolutely.

moneypenny20

Not sure about nation wide or even international but certainly around here every take out or restaurant who've turned to take out are asking that people ignore Uber Eats and have employed their own delivery staff. Hopefully this continues. I'm not sure how any take out place survives with the likes of Uber Eats etc or why people are prepared to pay the additional expense but then I've always been able to be a go and collect myself kind of person.

My local shopping centre was definitely more crowded yesterday than it has been but people are still happily doing the 1.5 metre gaps. I wish that could continue forever but realistically know I'll be growling at people for getting in my space again soon.

GarryP

I think we'll end up with more 'dark kitchens'. The money you save on rent and wait staff more than pays for the delivery costs. Plus you can service more than one culinary type, Thai and Italian from the same space.

Amazulu

The little Japanese restaurant up in Kalamunda that we often go to does most of their business through take away - even before C19. He refuses to use Uber Eats as their commission is huge, so it's pick up only. Interestingly, he's still doing okayish - certainly enough to cover his costs and keep his staff employed

GarryP

Interestingly in the US, where they are trying to reopen restaurants ahead of actually getting any control of the disease, many are refusing to do so.

Basically the social distancing makes it uneconomic, and coupled with many restaurants making more money on takeout/delivery, they aren't chomping at the bit to throw open their doors.

https://www.businessinsider.com/gaho...20-5?r=AU&IR=T

As I suggested, reopening shops isn't going to be quite the obvious step that some are thinking.

GarryP

And here is the Murdoch press saying similar :

https://www.news.com.au/finance/busi...3ab6c97064b872

Amazulu

Accent Group need to be careful as footwear is one thing that is better bought in-store - in fact, I reckon it's a must. I've bought shoes and trainers online before and it's usually been a disaster and now I don't bother. They could end up hurting themselves