Prior to 2020, trends suggested a major decline, if not the demise of physical retail. Three years later, this is definitely no longer the central issue.
While we are still grappling with volatile economies, the conversation has shifted to the future of retail - an omnichannel world where the most successful brands are those that understand their customers and seek to connect ever more with them.
The retail real estate industry has gone through one of the greatest stresses imaginable and not only survived, but emerged stronger than ever in certain segments.
The Main Streets Across the World report focuses on these segments in the best urban retail locations. Places that have shown enormous resilience, even with regional and market factors.
See some of the insights presented by the study.
Oscar Freire in Brazil is among the most expensive rentals in the world
Rua Oscar Freire, in the city of São Paulo, is the only Brazilian location in the global ranking, with the 38th most expensive retail rent in the world, 2 positions above the pre-pandemic ranking.
After a 1.4% increase in 2021, Brazilian retail sales are down year-on-year at the 2.3% growth rate to date.
South American countries, in general, had more difficulty in containing the virus, less internal stimuli, and, as a consequence, experienced slower economic recoveries.
Online retail slows down
Unsurprisingly, the challenges consumers faced in going to brick-and-mortar stores during the pandemic boosted online sales. Doubts then arose as to whether this increase would continue with the reopening of physical trade.
So far, the data suggests online sales have slowed year-on-year, although they remain above pre-pandemic levels. Several online retailers have reduced headcount and curbed their voracious appetite for storage space over the past two quarters, a reflection of the brick-and-mortar recovery.
Consumer confidence worries
The main driver for maintaining and growing retail sales is, of course, an increase in consumer confidence levels. According to the Organization for Economic Co-operation and Development (OECD), consumer confidence levels globally are at their lowest levels this century.
The uncertainty of inflation and the pressure on domestic spending – financing, higher rents, energy and food costs – left consumers uncertain about the next 12 months.
The expectation is that once there is some indication that inflation is stable and on the decline, we will see consumer confidence pick up.
The global impact of tourism
The tourist trade has always been important for retailers, especially those located in cities that attract millions of visitors annually. Before the pandemic, travel and tourism was one of the most important sectors in the world, responsible for 10% of global GDP and employing 320 million people.
Tourism numbers are not expected to return to pre-pandemic levels until 2023 at the earliest, according to the International Monetary Fund (IMF).
Click here to download the full Main Streets Across the World 2022 report.