October 22, 2020
“Right now, we’re in the midst of a storm,” Tom McGee, CEO of the International Council of Shopping Centers in New York City, said in a video discussion with Connect Media CEO Daniel Ceniceros. “And I think ICSC’s role during this storm has been to try to serve as an anchor.”
The stormy weather has, of course, manifested due to the COVID-19 pandemic and resulting economic downturn. However, while getting through that storm is currently job one for the retail sector, McGee doesn’t subscribe to the notion that brick-and-mortar operations will never be able to recover to pre-pandemic levels.
In the 30-minute conversation, McGee discussed long-term demographic and retail trends as well as the current environment. Those trends bode well for operators who are able to capitalize on them.
That being the case, McGee acknowledged, “Clearly, we’re living in a very uncertain and unprecedented period of time. We fundamentally shut down the U.S. economy” during the second quarter, and retail was “at the epicenter of that.”
More recently, the numbers have begun to recover, with the back-to-school selling season a notable bright spot. “Back to school was strong,” said McGee. “The composition of sales was different, because schooling was different than it has been in the past.”
In the current environment, so-called essential retail will continue to do well, McGee said, as will retailers who have successfully integrated omnichannel into the mix. “I don’t think you’ve seen new trends, but you’ve seen an acceleration of trends that existed prior to the pandemic,” he said. “I have to say it feels like we’ve had five to 10 years of change happen within six to eight months.”
A recent forecast from Deloitte called for year-over-year growth in holiday sales: not a dramatic uptick, but growth nonetheless during a period of general economic contraction. ICSC is conducting its own holiday survey and while final results aren’t available yet, “I wouldn’t be surprised to see a modest increase in holiday spend,” said McGee.
Over the long run, McGee said, “The health of retail and the health of consumer spending are completely tied to the length of the pandemic. And a lot of this has to do with the overall health of the economy and how much government support plays into all this.”
Watch the video below:
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