The changing face of retail construction post-Covid-19

The pandemic has changed the face of the high street as retailers hit tough times. But there are signs that the construction pipeline for the retail sector is picking up and there’s cause for cautious optimism as a result of 2021 growth forecasts.

Roaring 20s?

With a construction champion leading the government, there are signs that the instability and volatility before the 2019 General Election have finally calmed down.

Boris Johnson has committed his party to building back better and greener, and with a predicted ‘Roaring 20s’ on the horizon as consumer confidence grows as we move into a post-lockdown world, there’s plenty to feel confident about in the retail construction sector.

The success of the government’s vaccination rollout, some of which has taken place in retail centres, coupled with increased savings accrued over 2020-1, should see consumers taking to the high street once social distancing measures have been relaxed. And that could have a knock-on effect to retail construction and the wider construction sector.

Adapting to the situation

The pandemic has seen more than the fall of retail giants like Debenhams. There’s been a profound shift in the way we purchase, which has had a deep and lasting impact on the food retail sector. A full scale overhaul of the way that food retail businesses operate and the buildings they operate from is underway.

So-called ‘supershed’ distribution centres are being constructed and repurposed to meet customer demand and the shifting dynamics of supply chains that are beginning to recover post-pandemic. With 38% of consumers saying they plan to buy more online even after pandemic restrictions are lifted, there’s growing demand for warehouse space for multi-channel and pure-play retailers. In fact online sales are predicted to account for 32% of all retail by 2024, which will have significant implications for the logistics market.

Evolving consumer needs

Prior to 2020 demand for warehousing space among pure-play retailers was slowing but the coronavirus uptick in online sales has seen acquisition rates rise as companies seek to meet the rise in current and anticipated demand.

The move towards greater levels of automation has also received a boost as social distancing measures have increased pressure on square footage. Predictions of 1.36m sq ft of warehousing space per billion of sales may shrink as efficiencies in technology and automation accelerate.

As customer demands evolve, retailers' needs change and with them the retail construction industry. As the pandemic recovery gathers pace the sector will need to directly respond to retailers demands with premises that are fit for purpose.

Sustainability continues to resonate

More than ever consumers are making retail choices based on the environmental and ethical choices of the businesses they buy from. Those choices can be reflected in products, supply chains and even the way stores are designed and built to have a minimal environmental impact.

With the construction industry responsible for 30% of emissions these considerations may have a deeper impact in the years ahead. The use of sustainable materials and modern methods of construction may be critical in facing the demands and challenges of retail construction going forward.