Normalization Of The Epidemic Situation, Lack Of Passenger Flow In Shopping Malls And Shopping Centers

Since March this year, more than 100000 cases of local infection have been reported nationwide, affecting 29 provinces, showing the characteristics of multiple points, wide coverage and frequent occurrence, and the impact on real business is still continuing.

On April 5, due to the need for epidemic prevention and control, Raffles Hangzhou and Yintai city in the west of the city temporarily suspended business to cooperate with the epidemic prevention work. On April 6, the two shopping malls resumed business after full staff nucleic acid testing and professional and comprehensive disinfection work. Hangzhou Raffles person in charge told lianshang.com that although business resumed, there was still no passenger flow.

On April 7, Hangzhou West Lake Yintai also had a confirmed case. Some merchants were shut down immediately, and the employees of the merchants were isolated after nucleic acid testing. In the afternoon, the shopping mall also carried out a comprehensive killing and nucleic acid test for relevant employees in accordance with the government's instructions.

This may also be an embarrassing situation faced by shopping malls under the normalization of the epidemic situation, especially in those cities with sudden outbreaks. In Shanghai, which is in the critical stage of epidemic prevention and control, many shopping malls are even temporarily closed. Many Shanghai industry insiders interviewed said that the impact of the epidemic on Performance and passenger flow is far greater than before.

Prior to this, during the one week suspension period due to the epidemic situation in Shenzhen, according to the survey conducted by the Shenzhen retail commerce industry association, sales and passenger flow of all department stores and shopping centers have decreased since 2022 compared with the same period last year. More than 80% of the enterprises (81.8%) of the enterprises in department stores and shopping centers said that their sales and passenger flow dropped by more than 15% compared with last year.

It has become a common consensus among businessmen.

　　01、 Weak consumer demand

As the main stores of shopping centers, cinemas usually play the role of passenger flow engine, and the box office level can be used as a weathervane for the revenue and passenger flow of shopping centers. However, since the beginning of this year, cinema people have to face the current situation of dismal box office.

With the expansion of the scope of the epidemic, more and more cinemas have been suspended from business. The original 11 films released on the Qingming Festival have been withdrawn from the archives, and only three imported films have been put on line. Under the situation that the national cinema business rate is less than 50% and all domestic new films are withdrawn, the box office of this year's Qingming Festival is only 110 million yuan, which is the lowest box office record in nearly 10 years (except 2020). In March, the total box office of the film market was only 913 million yuan, a record low in the past 10 years (except 2020).

Cinemas may not be the worst. Since March 13 this year, the business of teaching and training in Hangzhou shopping center has been suspended, and there is still no sign of reopening, which can be described as a heavy loss. Moreover, for the shopping center, this business type could have brought stable and sustainable passenger flow, but now it may also need the shopping center to reduce their rent.

"Every time the store is closed due to epidemic prevention, we will comfort the merchants and reduce some rent. For example, we will reduce the rent of at least 1-2 million for the teaching and training business, and the costs can only be borne by ourselves." Yaqing, head of a shopping center in Hangzhou, said.

It has been nearly three years since the outbreak of the epidemic. Although consumers' panic about the epidemic is gradually weakening, on the whole, consumers are inevitably worried when shopping in crowded shopping malls. Although the adaptability of major cities to cope with the outbreak has been enhanced, the frequent occurrence of outbreaks will, to a certain extent, cause the overall demand of consumers to be sluggish and their consumption desire is not strong.

Ms. Wu, a 95 year old who lives in Hangzhou, said that she used to visit shopping malls on weekends, but there have been a number of confirmed cases in Hangzhou in recent days. In particular, on April 5, asymptomatic infection of the new coronavirus appeared in Hangzhou Raffles center, causing more than 2000 people to stay in the shopping mall for many hours, and the thought of this made me tremble. In fact, we found in our interviews that consumers with such concerns are not alone.

Qiao Qiao, the person in charge of a shopping center in Hangzhou, told lianshang.com that epidemic prevention and control did have a great impact on consumer confidence, and actually caused no income in the shopping malls. Originally, the passenger flow of the two days before the Qingming holiday had recovered to 80% of that of last year. However, there was a case in a shopping mall on April 5, which led to a very poor passenger flow at noon on April 6. However, we are not the most difficult one.

Gu Chang, head of a shopping center in Hangzhou, also expressed a similar view. "The long-term and strict epidemic prevention measures have led to a sharp drop in passenger flow, especially in catering and entertainment formats. In addition, shopping malls are unable to operate commercial activities routinely, and the control of activity venues and the reduction of entrances have led to the decline of passenger flow and sales, and it is difficult to boost market confidence."

The impact of the epidemic on normal shopping centers is still the same. For some projects in the preparatory period, the pressure can be imagined. Wang Bo, the person in charge of a preparatory project in Hangzhou, said that we are still advancing according to the original plan. However, at present, there are many problems encountered in investment promotion, and foreign merchants can not see them at all. This year's opening plans have also been reduced or even stopped.

　　02、 Businessmen call for policy implementation

Qiao Qiao frankly said that it is difficult to carry out normal operation due to the continuous epidemic situation, and both Party A and Party B are about to "collapse". "If it goes on like this, it is very difficult for some merchants to carry on. At the end of April, we have lost shops. As far as I know, the vacancy rate of a city shopping center under a well-known developer is even close to 40%, and the average regional investment promotion rate of well-known developers has dropped to 70-80%".

The survey conducted by Shenzhen retail trade association also confirms this point. Department stores and shopping centers participating in the survey all said that since 2022, brand shops have been asking for rent refund due to the difficulty of sustaining; The average number of brand shops in the survey enterprises was 24.4, and the average rate was 11.9%; Among them, 28% of enterprises have the highest rate of rent withdrawal. Enterprises generally reflect that the current situation of department stores and shopping centers is grim, and even some brand shops have been closed down directly due to operating losses, unable to pay the rent on time.

For Party A (shopping malls) and Party B (tenants), the most important thing is to hope that more supportive policies can help solve the difficulties. In fact, some cities, including Shenzhen, Hangzhou and Shanghai, have also issued relevant policies to help enterprises out.

Taking Hangzhou as an example, on March 27, Hangzhou launched 40 policies to promote the recovery and development of difficult industries in the service sector, including the reduction and exemption of rents of market entities. Small and micro enterprises in the service industry and self-employed industrial and commercial households who rent houses belonging to state-owned enterprises in the city or district shall be exempted from the rent for three months, and the rent for three months shall be reduced by half.

Encourage non-state-owned housing rental entities to reasonably share the losses caused by the epidemic on the basis of equal consultation. All localities can co-ordinate all kinds of funds and give appropriate assistance to small and micro enterprises in the service industry and individual industrial and commercial households that rent non-state-owned houses. For the owners whose rent is reduced or exempted, if it is really difficult to pay the property tax and urban land use tax in 2022, they can apply for reduction or exemption in accordance with Article 3.

Qiao Qiao pointed out that Hangzhou has no further detailed plan at present, and we hope that the policy can be implemented as soon as possible. Qiao Qiao's appeal also represents the aspirations of the majority of shopping center operators. In fact, many project general managers interviewed by lianshang.com all mentioned that they hoped to get substantial support from the government.

Yaqing said that we spent 2-3 million yuan a year on epidemic prevention. In terms of energy consumption, Hangzhou's policy mentioned that water and gas charges should be deferred. For shopping centers, the biggest expenditure is electricity. In particular, electricity prices have increased by about 20% this year. We hope that the government can provide some subsidies on electricity charges. In addition, the policy is more about supporting small and micro enterprises. Medium sized enterprises like us also face high costs. Is there any corresponding support policy?

In view of the government's assistance to enterprises (merchants), Gu Chang put forward several suggestions

1. Introduce preferential policies: for emerging industries, small and medium-sized enterprises, there are different dimensions of supporting policies, such as rent reduction, tax and fee reduction, water and electricity charges, low interest loans, etc., to ensure the viability and innovation ability of brands;

2. There should be government-side incentive policies for consumer confidence, such as consumption vouchers, unemployment subsidies, isolation subsidies, medical subsidies, travel subsidies, etc. Let people have positive confidence in consumption even if they are ill or isolated;

3. The epidemic control should be flexible and humanized, with measures to ensure people's livelihood and material circulation, so as to reduce the impact on people's lives;

4. For the promotion of business, we should actively liberalize the regulatory and approval policies to promote the implementation of commercial activities.

5. We should be more flexible in the aspect of epidemic control and law enforcement. We should be cautious in the measures to close stores in a wide range.

　 　03、 Party A and Party B need to overcome difficulties together

Compared with 2020, the rent reduction of shopping centers is rare. Qiao Qiao revealed that it is not that Party A is not willing to reduce the rent, in fact, Party A's life is not easy. From the current point of view, everyone's expectations of the market have fallen to the freezing point.

Wang Bo also said, "the passenger flow of the physical retail industry has declined greatly, the performance of Party B has generally declined, and the government has asked Party A to reduce the rent fee, etc., but the expenses of Party A have risen sharply, the income has dropped sharply, and the compression on both sides is severe."

In March of this year, Hangzhou Sijiqing appeared "file closing protest", asking the market to refund or reduce the rent, which, to a certain extent, put the contradiction between Party A and Party B on the table again. The owners and merchants themselves are two subjects of "lip and tooth dependence". In difficult times, both parties are victims. It is unfair to ask one party to bear all the losses. Both sides should help each other in the same boat, overcome difficulties and better serve the overall situation of epidemic prevention.

Some people in the industry pointed out that it is fairest for shopping malls to handle such matters according to local guidelines. For specific categories or specific businesses that are seriously affected by the epidemic, shopping centers should try their best to support them and tide over the difficulties. And the merchant also can't ignore the contract agreement with the owner, blindly vexatious.

Of course, no one can deny that the owner or operator and the merchant "prosper with each other, lose with each other", and die with cold lips and teeth. Despite the difficult situation, in fact, some owners or shopping malls have begun to take action to reduce the rent of the merchants.

On March 23, Shanghai global port and Changzhou Jiangnan global port issued an announcement announcing the introduction of a special support policy of "three free and three halved" to provide special assistance to merchants. It includes purchasing special insurance for new crown pneumonia, giving online and offline media advertising resources, reducing half a month's rent, property management fee, energy consumption fee, etc., and distributing fresh fruits and vegetables free of charge.

Various projects in Shanghai focus on detailed operation, and implement more frequent and more granular risk tenants, combing & Evaluating & helping, one store and one policy; At the same time, it also provides multiple takeout platforms for merchants to use; Improve better operation support, help merchants to do online and offline marketing promotion during the epidemic.

Wang Guoping, a member of Lianshang senior advisory group, believes that there is still serious information asymmetry between shopping centers and merchants. "The merchants don't know their own rent structure. They don't have a concept about the rent level. They just hope that the shopping center can support them when it is difficult. At the same time, the shopping center has taken on a lot of responsibilities under the epidemic situation, and has not communicated with the merchants in time to exchange positions, which leads to the merchants' misunderstanding and even misunderstanding that the shopping center only wants to get rich under the epidemic situation The development of the shopping center is the result of the joint efforts of both parties, so it is necessary to maintain good communication. "

Of course, in an uncertain environment, rent reduction is only an expedient measure. Both shopping malls and merchants should actively start from themselves and take the initiative to activate their business capabilities.

Fortunately, after the impact and "baptism" of the epidemic in the past three years, businessmen have long anticipated and prepared for the difficult situation this year. Li Ling, a consultant of lianshang.com, pointed out that it was difficult last year, and it is not easy this year, but fortunately, the difficulties this year have been put in the light. It will be easier to deal with them. Are you ready?

* Qiao Qiao, Yaqing, Wang Bo and Gu Chang are pseudonyms in this paper