Realtors call retailers ‘bad actors’ for not paying rent
Customers will relate more to the retail chain than the property managers
Bad actors: That’s what one chief executive officer called retailers who won’t (or can’t) pay their rent due to decreased sales. According to the Wall Street Journal (via The Real Deal), “We think that it’s their duty to pay April rent,” said Conor Flynn, the CEO of Kimco Realty. “The customer base is going to recognize who the bad actors are.”
And while there may be some consumers who will ponder on why retailers like Burlington, Petco, LVMH Moët Hennessy Louis Vuitton, Staples and Victoria’s Secret haven’t paid their rent — anywhere from 10–25 percent for mall owners with nonessential tenants to 50–60 percent for essential tenants — chances are much more likely that consumers will relate to the retail chain (tenant). After all, their own consumers are trying to make ends meet when it comes to bills, mortgages, rent and basic living necessities.
It’s not a secret that non-essential purchases are down: clothing purchases have decreased 15 to 20 percent and beauty purchases have decreased 5 to 10 percent. Consumers are extremely focused on getting exactly what they need on a day-to-day basis, and there’s a boost in purchases:
- at-home fitness (35–40 percent)
- medicine/medical supplies (20–25 percent)
- grocery/dry goods (15–20 percent)
- at-home entertainment (15–20 percent)
- pet supplies (10–15 percent)
- healthcare services (10–15 percent)
- grocery/perishables (10–15 percent)
While the case can be made that some retailers have figured out ways to get around the non-essential ruling with the help of online purchases or drive-up deliveries, others heavily rely on foot traffic to make most of their sales. And consumers are definitely hearing all of their marketing tactics to figure out their latest ideas to make a profit, handle refunds and/or use store reward points. It’s difficult to buy into the “bad actor” theory when none of these retailers have thrown in the towel on trying to get customers to engage.
If realtors are relying on the customer base to be the ones who wag a finger and don’t support these companies once the dust settles, then they’ve grown particularly tone deaf to recent circumstances. Insulting the companies who are trying to figure out a way to do business during a crisis that has affected more than 1.9 million people and lead to more than 123K deaths isn’t the way to go. By calling the retailers “bad actors” for not being able to pay their bills, it’s too easy to assume those same realtors have similar opinions about consumers who are juggling their own income around, too.
If ever there was a time for a negotiation period (or flex period) straight across the board between realtors and retailers, this is it. In turn though, if customers will have these retailers’ backs once COVID-19 settles down and infection rates dwindle, retailers better keep that same energy with consumers who may be juggling to pay their own store credit card bills, too.
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