Business confidence in downtown Cape Town continued its late 2021 recovery during Q1 2022, according to the Cape Town Central City Improvement District’s latest Retail Confidence Index.
Close on 62% of Cape Town CBD retailers who took part in the survey indicated that they were ‘satisfied’ with current business conditions – the second consecutive quarter in which retail confidence, as measured by the CCID Retail Confidence Index, moved into positive territory since the start of Covid-19 in 2020.
Just over half of surveyed retailers were ‘satisfied’ with business conditions in Q4 2021, although this represented a marked improvement from a reading of just 39% in the preceding quarter.
The pandemic’s impact on business
The CCID survey, which includes at least 200 retailers doing business within the CCID’s 1.6km2 footprint, and in all major retail categories, was first conducted in July 2020 when Covid-19 regulations were eased. In the first survey, confidence among inner-city retailers was a mere 23% with nearly 52% of the retailers indicating that there was a ‘medium’ or ‘high’ risk that their businesses would ‘fold’ before the end of 2020 as a result of the lockdown restrictions.
In the latest survey, conducted in February 2022, a significant percentage (69.6%) of retailers indicated that there was ‘no risk’ of their businesses going under before the end of 2022, with feelings of buoyancy and hope.
“I am extremely encouraged by the recovery we have seen over the past few weeks as there is a sense of optimism and energy in the air. People are excited to be out and about again, to socialise, and to wine and dine together. We can feel it in the streets, and we can see it in our numbers … We are doing better numbers now than even before Covid-19. It is very encouraging”, comments Bree Street retailer, Matt Manning, Chef Patron at Grub & Vine and the Chef’s Studio and owner at Culture Wine Bar and the Blue Room.
“While the last survey done in 2021 was conducted just before news of the Omicron variant disrupted business once again, the lifting of the night-time curfew at the end of December ushered in the start of the revival of the night-time economy, bringing an influx of restaurant, bar, and club patrons back into the Central City”, comments Tasso Evangelinos, CEO of the CCID.
“This, coupled with the return of office workers and the steady recovery in the tourism industry, is behind the rebound in confidence among inner-city retailers. While further waves of infection are likely, we remain positive regarding a continued recovery of the retail sector in the CBD during 2022”.
Risk of closure
The perceived high risk of closure during the first year of the pandemic translated into an estimated 111 retail businesses closing their doors in downtown Cape Town by the end of 2020. However, a total of 37 new businesses began trading last year.
At the same time, the vacancy rate across all precincts rose to 11.5% (31 077m2) of the total retail space available in the Central City in 2020, up from 9.4% at the end of 2019.
However, continued redevelopment of commercial buildings and the net increase in new retail outlets resulted in the vacancy rate declining once more in 2021 – easing from 11.5% in 2020 to 9.9% (26 747m2) by the end of 2021.
As we move into Q2 2022, Central City’s retailers have adjusted to the ‘new normal’. Not only has retail confidence improved, but new businesses continue to open. The majority of these are cell phone stores and coffee shops but a notable number of pop-up art galleries, bars and clubs, and restaurants have joined the mix.
In the past two years, the quarterly confidence surveys revealed that retailers reduced overheads, trading hours, and staff numbers as they grappled with lower levels of economic activity particularly during the more restrictive periods of lockdown.
Fortunately, things are turning around. Casey Augoustides, co-owner of Mike’s Sports retailer and co-developer of The Barracks residential development in Bree Street, says that after two difficult years, with turnover halved due to Covid-19 protocols and the lack of team sports taking place, they’ve seen much improved trading in February and March 2022. “Things have started to improve for us in the last two months. There has been a general return to business in the CBD, which is promising”.
This is confirmed by the latest confidence survey, which reveals that nearly 47 % of surveyed retailers are not planning any further adjustments to overhead, trading hours and staff numbers in the year ahead.
Article originally published on www.capetownccid.org.za.