Coronavirus: Shopping strips may never be the same after COVID-19 lockdown

By Lydia Batham of RNZ

Under lockdown level 4 New Zealand's shopping centres have become ghost towns - and there are fears they might never be the same again.

Expensive rents and a sales downturn meant the retail sector was already struggling - the coronavirus has only compounded that.

And there's no end in sight. Under the just announced level 3 rules, stores will only be able to open for delivery and contactless pick up.

On Auckland's Ponsonby Road, the normally vibrant and bustling up-market strips are empty and 'for lease' signs cover various store fronts.

It's a hard sight for Chapel Bar's Luke Dallow, who says many will likely remain vacant well after the lockdown ends.

"I think when we get out of Covid and down to level 1 or over Covid completely, even down to level 2, there are going to be some cafes and restaurants that will not open. They just can't afford it - they will not be able to open.

"They've probably already got struggling balance sheets at the moment and we won't see them open unfortunately."

Dallow said filling those stores will only become harder now, with the heavy economic impact of Covid-19.

Auckland's Ponsonby Rd during lockdown.
Auckland's Ponsonby Rd during lockdown. Photo credit: RNZ / Lydia Batham

Unless rents are slashed along Ponsonby Road to match the financial hit suffered by businesses, other shop owners will also decide against renewing their leases.

"For commercial real estate, also it's going to be very expensive. I think commercial real estate owners need to say 'I'd rather have someone in my building and pay less than it being empty and making no money'."

WORLD has boutiques in both Ponsonby and Newmarket and the fashion label's founder Dame Denise L'estrange-Corbet agrees.

She said many retailers will likely start moving away from bricks and mortar, towards online sales where landlords don't have the power to sink a company.

"A lot of brands are going to restructure and look at how they retail and whether they need bricks and mortar shops to trade or whether they go completely online.

"If you can't afford to keep paying the rent and the landlord is not going to come to the party and you want your business to survive, and it has to survive in another way, then that's all you can do."

Newmarket Business Association chief executive Mark Knoff-Thomas said some of the 'for lease' signs along Broadway were there before Covid-19 struck, with shops moving into the newly built mall.

"Some of the brands who came out of Westfield have gone back in and they have taken up premises along Broadway and some of our side streets. And other brands that weren't in Westfield have also gone in and that's what we had expected.

"Leasing actually had been going really well pre Covid-19 and some of our key sites along Broadway had been leased and were due to be fitted out and some others will be fitted out once we get back to some kind of normality."

Businesses most likely to survive were the ones who'd already embraced online sales, he said.

"Our retailers who have embraced omnichannel retail in the sense they're digital, they're social, the website, the bricks and mortar experience, they've pushed themselves out to their customers, they are the ones that are probably going to rebound very quickly.

"Those retailers in bricks and mortar who haven't necessarily had much of an omnichannel footprint for their own brand, they I think are going to have some very rough times ahead."

The look and feel of New Zealand's main shopping centres is likely to feel different for a long time to come, and much like how people are adjusting to virtual meetings and digital learning - a trip to the shops might consist of opening different tabs in your browser.