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The Resilience and Resurgence of Retail

How retail led the resilience of the American economy into the post-pandemic world

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Since March 2020, we’ve pivoted, adapted, re-calibrated and said, “new normal” so much that it has become the “new normal.” Through shutdowns and re-openings, layoffs and staff shortages, online groceries and supply chain disruptions, we’ve all had to find a deep well of resilience to persevere through challenging times.

While we often perseverate over our shortcomings and missteps since the world turned upside down, we owe ourselves a pat on the back for areas where we have managed to excel in the face of adversity. Certainly, the first tracks on our “COVID Greatest Hits” album are dedicated to the medical professionals, teachers, and other essential workers that have answered the calls over and over and continue to do so.

After thanking our heroes, we should also give a tip of the cap to our economy. It would not have surprised any of us if the 2020 recession had been deeper and longer. In fact, most of us anticipated that it would be, and in other parts of the world, it has and continues to be. While inflation and other headwinds remain, we enter 2022 on an economic trajectory that we all would have gladly signed up for 18 months ago.

Maybe we are biased, but the retail sector is the perfect microcosm of the resilience of the American economy. We have long been an economy driven by consumer spending, and while COVID accelerated the trend towards spending online, our shopping centers weathered the brunt of this crisis and have emerged stronger and in better shape than at any point since before the Great Recession. 2020 served as the catalyst the industry needed to “clear the waters” of several brands that were already sinking. 2021, then, allowed the brands and businesses that had the fundamental strength to push through this latest “retail apocalypse” an opportunity to adapt, analyze and eventually double down on what they’ve learned about how to keep their business thriving.

“The strategy we adopted in the height of the pandemic is playing out better than we could have expected,” Simon Property Group Chairman & CEO David Simon told investors on the company’s earnings call. “We made the right move. We got the renewals done. We accommodated the vast majority of retailers, assuming they were reasonable in their approach. We got the job done. We kept our properties functioning. We bet on the rebound. And we’re seeing the benefits of that.”

Some of the more resilient brands benefitted from their inherent product and service lines. Grocery, pharmacies, fast casual and drive-thru restaurants and smaller format convenience stores flourished. But more traditional retailers have gotten back on track as well and even surpassed pre-pandemic performance indicators. The most basic and competitive retail sector, clothing and accessories, has shown increased monthly sales over 2019 numbers consistently since March 2021 ( Meaning, not only did retailers make up for the dramatic losses in 2020, they have outperformed 2019 on a consistent basis, even through the ongoing pandemic.

Restaurants have perhaps been hit harder than any other industry in the pandemic. While they face their own uphill post-pandemic battle, their current woes are more related to employee shortages and a disastrous supply-chain than a lack of consumers and demand. A record number of restaurants closed in 2020, but second-generation restaurant space is being absorbed at record pace (
2020, 2021 and now 2022 have been viewed through catastrophic, apocalyptic, pandemic-smothered lenses. However, if you peel those lenses off, you will see the same themes that have driven our economy for years. The businesses, retailers, and concepts that understand their customers, changing behaviors and preferences, and can adapt successfully to meet them, will survive and grow. You just need to visit your local shopping center to see this dynamic in action.