The state of the economy is a significant area of focus these days. Businesses are struggling more than ever due to the impact of the pandemic. Thus, we thought it would be worth looking at different retail projections in major cities, such as London.
Eixos is a Catalan firm specializing in retail mapping and data. Before the current pandemic, we had the opportunity to learn from them the characteristics of retail models in different cities, especially Barcelona and Manhattan.
In the past few months, Eixos has been conducting different surveys and analyses in many cities to evaluate the impact of he Covid-19 pandemic on retail.
To learn more about what the retail scenarios will look like post-Covid and what businesses and cities could do, we talked to Eixos’ CEO, David Nogué.
Hello David! Could you tell us about your work at Eixos and your most recent projects?
Part of the work we do at Eixos is analysing the map and the retail in different cities. Once we have the data, we start using the analytics to detect opportunities, issues, and predict different scenarios. We also advise city administrations, real estate owners, engineers, or whoever is interested in this information, allowing them to decide on retail locations.
Talking about London, could you describe the model you used to gather data and make predictions about the Covid-19 retail businesses’ impact?
London is the last project we did, and it took us two months to map it all. We started the work pre-Covid, and we had all the data just before the lockdown. When the lockdown began, 90% of stores had to close as they are non-essential. Especially for small businesses, two months is a long time to stay closed.
We considered different risk factors to forecast what may happen in the future. We analysed several parameters, such as inventory cost and food wastage for restaurants, which implies higher losses.
In your last presentation, you mentioned three scenarios that could happen post-Covid: low-risk, average risk, and a high-risk impact. Can you tell us the likelihood of these scenarios happening and anything to avoid the highest risk scenario?
We set these scenarios to work out a projection, similar to how fire risks are assessed. We took into account the uncertainty and evaluated degrees of severity impact. To improve these scenarios, we need public administrations to step up and do their best to help. Some of them are already helping small businesses by waiving some taxes or injecting money into the economy. Additionally, more initiatives are being taken by the private sector. Many real estate owners are lowering or deferring rent until the pandemic is over.
Naturally, the final scenario depends a lot on all the external help that retailers receive. Currently, it looks like London is likely to experience the lowest impact scenario. However, we can only be certain after Christmas. Many businesses are counting on Christmas sales to boost their revenues.
Other than London, Eixos has done similar studies in other cities. What are the differences to other cities? And what do you think are the reasons for these differences?
We’ve been looking at multiple cities, including Valencia, Barcelona, Bilbao, Sao Paulo, New York, and the Covid impact on many factors. A substantial factor is urban distribution. There are cities like New York and Barcelona that have a very dense retail grid. In Barcelona, there are 1000 stores per km2, which is a very high density of retailers.
On the other side, London has a low retail density and a segregated model of stores. There are less than 200 stores per km2, but the retail density is 10 times bigger than in Barcelona or New York in the city centre. Each model brings different impact scenarios. So far, we are yet to find out which one will be the most resilient.
In London, the more significant risk is that some areas might run out of stores, impacting mobility and travel.
Can you offer any suggestions to businesses and city councils?
We proposed a few strategies to recover the most affected areas. One approach was to move stores from one place to another. We established key areas that will have a robust retail situation post-covid. We suggested moving businesses to these spots. Some businesses are already adopting this tactic and moving their stores to the center, looking for better retail and financial opportunities.