Editor: I read the article ‘Wade warns of Armageddon’, with interest and a little frustration.
While coronavirus has been a global emergency of almost unimaginable reach and lockdown has triggered widespread social and economic impact in the UK, it is not entirely to blame for the shortcomings of our retail and hospitality sector. The reality is that many businesses were in a state of crisis before the virus struck.
Retail is going through a period of revolution, as new technology makes traditional formats and trading locations outmoded. This step change is perhaps even more marked than the move to out-of-town locations in the 1990s.
The hospitality sector has been suffering from over-saturation for some time. Customers have fallen out of love with casual dining, which is hamstrung by many badly defined concepts, poor food offerings, indifferent customer service and expensive portfolios of badly selected, positioned and negotiated restaurant leases.
The cold reality is that the same management teams that failed to spot or react to emerging structural change have also been caught flat-footed by the fallout of the virus crisis. It was Winston Churchill that said: “Never let a good crisis go to waste,” and the real estate industry should not either.
Many weaker operators will not survive, but their days were numbered, virus or no virus. This is only free market economics in action. Instead of seeing this as Armageddon, the industry could see this as an overdue opportunity to evolve.
Instead of looking to the government to subsidise or delay the outcome of long overdue structural change, a much stronger call to arms would be for the industry to use its entrepreneurial skills to repurpose hospitality and leisure businesses to bounce back stronger and better.
With our wide range of leisure, casual dining, health and fitness, hotel and retail offerings, Sequoia Real Estate is perhaps a good microcosm of the overall market. The past three months have not been easy, but we have emerged stronger and better.
We have spent a lot of time re-imagining our business and are excited about the opportunities ahead.
Jason Mills, founder, Sequoia Real Estate