THE ROAD BACK – CBD RECOVERY

When you remove the Business from the CBD what does it become?

Sadly we know the answer to that question. It is clear to everyone that CBD areas have been heavily impacted during the last 7 months. While food & beverage operators in the suburbs were able to benefit (to an extent) from displaced CBD workers working from home and looking for a morning coffee and lunch, the low CBD worker population resulted in terrible outcomes for many CBD operators.

Is there even a road back?

On a more positive note, a review of CBD food outlets show that the road back will be different from state to state but it is clear that there will be a correction to the current imbalance.

There is a vast difference between Sydney CBD, where currently an average of 25% to 30% of the pre Covid CBD workforce is at the office on some days compared to WA and SA where their in office numbers are a lot higher.

For example in WA the Perth CBD is currently hovering around 80% of pre Covid CBD traffic. The question is how quickly CBDs can get to at least a level of trade where cafes can be sustainable?

B&P suggest that 70% to 80% of pre Covid CBD traffic allows for this to occur.

What else can retailers do to survive the next twelve months?

Brain & Poulter can provide mentoring to help achieve the following:

1. Reassure customers – Provide a Covid safe environment and communicating this effectively is the base building block to re-establishing the business

2. Encourage operators to use all data available within their business to ensure that operational models, menus, margins are reworked and cashflow and sales forecasting are as accurate as possible

3. Increase dining capacity – as al fresco restrictions are eased how can this be maximised to increase venue capacity which has been reduced due to restrictions?

4. Marketing – help retailers understand where customers will come from and how to connect with them. In the short-term future there will be a need to create as well as convert traffic within the CBD

Even within any CBD there is significant variation with potential different recovery scenarios. From an asset perspective it is worthwhile briefly considering what can be done to address:

Office Lobby Cafes 

As workers return with potentially staggered work times and work days, what information will be available for retailers to tailor their offers and opening hours to cater for likely peak demand?

Operators should also clearly identify any catering shortfall and either innovate to maintain this to a degree or identify how to compensate for any reduction in catering.

Food Courts

7 Day trade was dependent on CBD workers, shoppers and tourists. International tourism is unlikely for a while. Suburban shoppers may come back at weekends – should “Shop & Dine” offers be encouraged?

Dining Precincts

In the absence of international tourists how can precincts encourage evening & weekend dining? It is reasonable to suggest that as customers feel safer that they will revisit the CBD once they become bored with living locally for so long?

In order to maximise the likely expanded alfresco capacity, consider what promotions or events can be developed in conjunction with food & beverage outlets and how this can be executed.

If we head back to 70-80% pre Covid levels, that means a re-calibration of the quantum of F&B and the ideal mix.

If you need help charting how to negotiate with tenants on short/medium and long term ways to recovery, B&P can help landlords assess what sustainable rents and concepts will be best suited through the recovery and beyond, along with support services for tenants to re-align their offerings and systems for the “No Normal”  environment we are all living with!

To know more and to speak with one of our team to book a demonstration of the products we have developed click the link below

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Use B&P’s Resources To Boost Your Portfolio Performance

Retaining your F&B portfolio will take more than rent abatement. Throughout the pandemic B&P has provided thought leadership and real time tools to manage F&B operations and preserve rent and customer amenity. We now have a whole suite of 8 CoVID-19 resources available to tenants and retailers to get through this pandemic and thriving on the other side. Check out our website for all the latest resources available.

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