COVID-19 is wreaking havoc on the U.S. retail market, but the post-pandemic fallout will mirror an outcome that was already in the works well before the crisis, according to Marcus & Millichap’s Beyond the Global Health Crisis: Business Closings Special Report.
While the impact of the pandemic has been harsh, it hasn’t been altogether devastating. “The severity of the economic blow to the economy, both in terms of job losses and the downturn in retail sales, has led to a significant shakeout in the retail sector, but all things considered, it has so far not been as bad as many anticipated,” John Chang, the national director of research services with Marcus & Millichap, told Commercial Property Executive.
COVID-19, Chang explained, is simply expediting a retail-market evolution that would have transpired over the next few years. Before the coronavirus, e-commerce was gaining 1 percent of total retail sales annually from brick-and-mortar stores. But with the health crisis, e-commerce has claimed nearly 20 percent of retail sales. Once the economy reopens, e-commerce will likely account for 18 percent of total sales, a figure the market would likely not have reached for an additional three years under normal circumstances, according to Marcus & Millichap.