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27 Aug 2022, 16:03 GMT+10
The retail sector is considered protective in the event of a stock market crash, as it is focused on stable domestic demand. Investments, especially in retail stocks, are intuitive, spontaneous in nature. Investment ideas are simplified.
Shares of convenience retailers are looking better than others in the current macroeconomic environment.
What will it be? The obvious consequence of an increase in the share of distributed grocery delivery to households will be the conversion of store space into dark stores. Obviously, stores will use the dark-store model not only for delivery to households, but also for in-store sample sales and collection of purchases in the dark-store.
Gainy notes that young investors are also investing in retail. This also makes the market very unpredictable. After all, new investors are setting unexpected trends.
The retail sector is beginning to be subjected to what might be called institutional social justice claims. Here are some of them:
It is more convenient for sellers to sell standardized goods with high margins and high average checks online. And customers do not want to waste time buying goods whose characteristics can easily be transmitted "through a screen", such as smartphones or sneakers. In such niches, there is a risk, if not complete, then the overwhelming transition to digital - the remaining categories of goods will continue to be sold offline.
Of course, this is partly since some services, which have become an integral part of retail outlets, simply cannot be transferred online. For example, a visit to a beauty salon is only possible, and the atmosphere of a restaurant will not be replaced by a virtual reality helmet and gloves just yet.
So, pay attention to street retail as well.
Now, street retail is retail or office space that is located on the first floors of houses. In such areas you can open a variety of businesses: stores, salons, cafés, gyms, and much more.
Street retail has two varieties. The first is the purchase of premises which already have an operating tenant, and the second is the purchase of vacant property.
The main reason for the popularity of street retail is the change in the way money is saved. For example, deposits in banks are not always profitable against the backdrop of rising inflation.
Speaking of the benefits of such a purchase, let's note that in commerce the payback is predictable. If you buy a highly liquid object in a new building, then in about 12 years you can earn its value.
The owner, as a rule, gets income not only from renting the property. The residual value of a highly liquid object increases substantially. For street retailers, this trend will not stop soon.
Many manufacturers will try to build direct connections with the consumer and give them a better price - retailers will have to respond to this challenge. Most likely, the answer will be that the grocery retailer will start to expand its ecosystem, so that the customer feels additional value from the purchase of the product, introducing bonuses that can be paid for within the ecosystem.
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