Producer/Lianshang Network & Search Shop Network
Written by Wang Xue
In the past quarter, the COVID-19 pandemic continued to ravage across the country. In response to the complex and severe epidemic situation, many places have been forced to press the "pause button" and implement global static management, and various economic activities have been affected to a certain extent, while the retail chain industry has borne the brunt of it, facing multiple pressures such as suspending operations and ensuring supply.
In mid-to-late March, the Shenzhen Retail Commerce Industry Association conducted a special survey on the impact of the operation of retail chain enterprises in Shenzhen during the one-week suspension of the epidemic. The results show that in the first quarter of 2022, the operating pressure of retail chain enterprises in Shenzhen is more severe and difficult than in 2021. Since 2022, sales and passenger flow of all department stores and shopping centers have declined compared with the same period last year, and more than 80% (81.8%) of department stores and shopping center companies said that their sales and passenger flow fell by more than 15% year-on-year.
Such a grim situation does not only occur in Shenzhen. A few days ago, "Lianshang Network" launched a questionnaire survey for the "leaders" of major shopping malls in Hangzhou, and made a thorough investigation of the multi-faceted impact of the current epidemic on physical shopping malls, and the results obtained were: 60% of the shopping malls fell by more than 20% in the first quarter, and the most difficult could only last for 3 months.
The person in charge of a shopping mall in Hangzhou said that the continuous epidemic has made it difficult to carry out normal operations, and the shopping mall has been dropped. According to its disclosure, the vacancy rate of shopping malls in a city under a well-known developer is even close to 40%, and the average investment rate of well-known developers in the region has fallen to 70-80%.
The closeness of the physical shopping mall and the passenger flow does not need to be repeated, cutting off the passenger flow is equivalent to cutting off the financial flow, the lips are cold, the large and small brand tenants in the mall are naturally directly impacted, and the sales cliff-like decline or even return to zero. To this end, Lianshang Network also conducted a sample survey of chain brand merchants, including clothing, catering, beauty, tide play and other formats, in order to have a relatively comprehensive understanding of the impact of the epidemic on brand owners in the first quarter. The results of the survey showed:
1. Compared with the first round of the epidemic in 2020, 89% of the companies surveyed said that this year's situation is more difficult.
2. From the perspective of the changes in sales from January to March this year compared with 2021, the sales of enterprises with sales decline of more than 10% in the first quarter were as high as 74%, and the enterprises whose sales fell by more than 30% also accounted for 47%, close to half of the total sample.
3. 63% of enterprises said that if the epidemic cannot be effectively contained according to the current situation, it can still support more than half a year, but nearly 26% of enterprises say that they can support up to 3 months, and there are many people who can only stick to it for one month.
4. At present, major brand merchants are mainly facing three pressures in terms of operation: one is the decline in the customer flow of the camp store and the decline in sales; the second is the loss of revenue due to the large-scale closure of the store due to the epidemic; the third is to continue to bear the cost of operation such as rent, manpower, and commodity loss.
5, in order to survive, major brands are also through various measures to save themselves, close the store to stop losses, strengthen online sales, reduce other operating costs and other measures have almost become a consensus self-help plan. The layoffs and salary cuts are generally used as the last substitute option into the self-help plan, which to a certain extent reflects the warmth of the enterprise.
6. In addition to self-help, brand merchants have also placed a lot of expectations on the industry's support and relief policies. Including rent reductions for property owners, reduction of loan interest rates, tax incentives, reduction of labor costs such as social security, preferential support for water and electricity, subsidies for epidemic prevention costs, etc. Among them, the lease side has become the most urgent point for brand merchants to bail out at present, and nearly 95% of the surveyed enterprises expressed their demands on rent reduction and reduction, including rent reduction and rent reduction, deduction reduction and guarantee reduction, adjustment of delivery date and rent-free period. Secondly, the issuance of consumption vouchers (58%), the expectation that the relevant departments will reduce taxes (47%), and reduce labor costs such as social security (42%) are among the urgent demands of the surveyed enterprises.
7, the people have been fighting the epidemic at home for a long time, work, life and other aspects have been affected, the uncertainty of income has greatly inhibited consumer demand, consumer confidence and consumption willingness have weakened, and it is difficult to recover quickly in the short term, which will inevitably form a resistance to market recovery. Consumption coupons have an obvious role in stimulating demand, promoting consumption, and boosting the economy, and since the outbreak of the epidemic in the past two years, the issuance of consumption coupons has become a powerful measure for cities to promote consumption recovery and economic recovery. In this survey, nearly 60% of the surveyed companies clearly expressed their expectation that the government will continue to implement the policy of issuing consumption vouchers.
In fact, in view of the serious decline in the leasing capacity of brand owners and the strong demand for rent reduction, some shopping malls have taken certain countermeasures.
For example, on March 23, Shanghai Global Harbor and Changzhou Jiangnan Global Port issued an announcement announcing the introduction of a special support policy of "three free and three halves" to implement special assistance for merchants. Including the purchase of special insurance for new crown pneumonia, the gift of online and offline media advertising resources, the reduction of tenants' rent, property management fees, energy consumption and other expenses for half a month, and the free distribution of fresh fruits and vegetables and other specific measures. Suzhou Global Harbor also implements the above policies at the same time.
Suzhou Blossom Center and Xiangcheng District Jiaotong Investment Group will reduce the rent of more than 300 tenants in the Blossom Center Mall, The Flower Neighborhood Mall and the Blossom Office Building, totaling 40 million yuan.
The projects of Greenland Colorful City Shanghai focus on refined operation, implement higher frequency and finer granularity of risk tenant grooming & assessment & help, one store, one policy; give tenants confidence at the same time, provide multiple takeaway platforms for merchants to use; enhance better operational support, and help merchants do a good job in online and offline marketing promotion during the epidemic.
The relevant person in charge of Shenzhen Shenzhen Shangcheng said that according to the corresponding policies in the "Shenzhen Municipality's Several Measures to Further Help Market Entities Relieve Difficulties in Responding to the New Crown Pneumonia Epidemic", it is proposed to reduce the rent of merchants in the venue, and the detailed rules for the implementation of the work are being promoted.
In addition, the introduction of inclusive subsidy policies for the retail chain industry and the encouragement and support of promotional fee activities are also a major expectation of enterprises affected by the epidemic. In this regard, many local governments have taken action.
On March 27, Hangzhou launched 40 policies to promote the recovery and development of difficult industries in the service industry, including six major items, including inclusive relief support measures for the service industry, bailout support measures for the catering industry, relief support measures for the retail industry, and relief support measures for the tourism industry. It is mentioned that the scope of the "six taxes and two fees" reduction will be expanded; some taxes will be reduced for enterprises in difficulty; the rent of market entities will be reduced; the subsidies for epidemic prevention and killing expenses of enterprises will be promoted; the recovery of the catering industry will be accelerated; and eligible retail enterprises can postpone the payment of unemployment insurance premiums for a period of not more than one year, and no late payment fee will be charged during the period of deferral.
Since March 28th, Shenzhen has resumed normal production and living order, at the same time, the Shenzhen multi-district government has issued a series of policy "gift packages" to support catering: futian district sealed control area catering shops up to 20,000 yuan subsidies, Longgang District issued 20 million no threshold consumption coupons... Recently, the Shenzhen Municipal Bureau of Industry and Information Technology and the Shenzhen Power Supply Bureau of China Southern Power Grid also jointly issued the "Notice on Supporting epidemic prevention and control and consolidating the power support of the industrial chain supply chain", proposing 10 power service guarantee measures to help enterprises bail out the stable chain.
At the beginning of April, Nanjing issued 20 measures to help enterprises bail out with "fighting the epidemic with one heart and bringing enterprises together", and solved the "urgent needs" of small and medium-sized enterprises through a number of strategies such as financial assistance, tax rent reduction, reduction of unemployment insurance rates, and discounted interest loans. In the "Ten Measures on Supporting the Relief and Stable Development of Service Industries such as Zero-stay Meals" issued, it is also proposed to implement inclusive and prudent supervision, and timely encourage the implementation of conditional blocks, open spaces and retail and catering shops along the street to carry out external positioning operations under the premise of meeting the requirements of epidemic prevention and not affecting traffic.
On April 11, the General Office of the Chengdu Municipal Government officially issued the Notice of the General Office of the Chengdu Municipal Government on Printing and Distributing Policies and Measures to Support the Healthy Development of Market Entities and Promote Stable Economic Growth, and issued 30 policy measures. It also proposes relevant provisions on allowing street shops to carry out external business activities and various promotional activities under the premise of accurate epidemic prevention and control.
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The 2022 epidemic situation is "cold in the spring", and it is difficult to be a synonymous word. Under the epidemic, no one can be alone, and the opposite of the mall should not be a brand merchant, and vice versa. In the special period, how to overcome the difficulties together is the focus, which is not the individual obligation or responsibility of a certain enterprise, but the common topic of the entire industry, which requires scientific and effective discussion and formation of a feasible implementation plan to achieve mutual assistance and overcome difficulties. The government should do a good job in supporting the corresponding policies and strive to create a stable and guaranteed operating environment for real businesses.
One point that cannot be ignored is that the decline in passenger flow and sales brought about by the impact of the epidemic, as well as the loss of revenue caused by the short suspension of the economy, has further increased the cost pressure and operational risks of enterprises, and intensified the contradiction between supply and cooperative enterprises, which has now been put on the surface. Brand enterprises urgently need rent reduction and reduction to maintain survival, department stores and shopping malls are also facing difficulties in rent recovery, difficulty in attracting investment, high rent withdrawal rate, high vacancy rate pressure, some unified leasing of large shopping malls and department stores, but also have their own rent reduction problems, enterprises into the game dilemma of leasing relationship.
Of course, the fundamental way to alleviate the financial pressure of enterprises and solve the anxieties and difficulties of enterprises lies in resuming normal operations and sales as soon as possible, promoting passenger flow and sales to pick up, and speeding up the recovery of business operations and consumer confidence as much as possible under the conditions of epidemic prevention, so as to normalize the operation of the market.