The vast majority of retailers in Bahrain plan to increase investment in online retailing and delivery apps, in the wake of the coronavirus pandemic, according to a new study.
The CBRE retail flash survey, conducted in June 2020 among 160 retailers and food and beverage (F&B) operators in Bahrain, found 93 per cent of respondents saying they plan to increase investment in online retailing/delivery apps and 75pc of them also responded they will increase their use of social commerce.
In addition, 33pc of respondents stated the pandemic led to digital sales becoming their core business.
“Covid-19 has been a catalyst for retailers in the Bahrain market to enhance their digital offering and the results of the survey demonstrate the level of attention and increased investment planned in this area,” said CBRE director of advisory and transaction services in Bahrain Heather Longden.
While the firm believes the role of bricks and mortar retail continues to be important, the survey found that store network consolidation has also become a focus.
There was a 50/50 split in the demand for brick and mortar retail space, with half of respondents stating that there would be a decrease in their demand for physical space whereas 50pc would either see no change or increase their requirement.
Notably, 31pc of respondents intend to consolidate their bricks and mortar store networks this year; although, 31pc of them also either plan to open new stores or are still uncertain.
Meanwhile, 57pc of retailers said they have a plan to increase or maintain investment in their in-store experience.
Ms Longden said global trends indicate the use of retail spaces will evolve – focusing on the experiential element.
“In the future, having a variety of sales channels, such as physical, online and mobile (including food delivery app) platforms effectively integrating to improve customers’ experiences look to be key in retailer strategies.”
All respondents stated Covid-19 has impacted their leasing decision-making.
Survey results show that 63pc of respondents have experienced disruption to leasing decisions since the outbreak.
Additionally, 44pc of respondents have said that site visits have been delayed or cancelled and 25pc are implementing a more stringent evaluation process for new locations.
A total of 93pc respondents have held discussions with their landlords about rental reductions and 73pc have requested rent-free periods for existing leases, while 47pc have discussed longer rent-free periods for new leases and 20pc requested fit-out subsidies.
Retailers are experiencing financial stress from the Covid-19 outbreak.
Most respondents have experienced loss of sales during the pandemic with 94pc stating this as a key concern while 81pc are concerned about meeting financial obligations.
Ensuring customer safety is also an important factor with 56pc claiming this to be of high importance along with supply chain disruption at 38pc.
The survey also found 52pc of respondents answering that they expect it will take six to 12 months for sales to return to pre-Covid-19 levels.