Although a significant portion of the stores were closed during the March-April period, the majority of tenants made up revenue losses, resulting in overall similar turnover as before the pandemic
Ceetrus Hungary Kft, the operator of Auchan Korzó in Hungary analyzed tenant turnover data and visitor numbers of the first half-year period as well as the impact of the coronavirus pandemic on retail turnover. The brand includes nearly 650 stores, service providers, restaurants and cafes in 18 Auchan shopping centers nationwide, including many well-known global brands.
Comparing the data of 2019 and 2020, the first half of this year was + 0.4% better than the first six months of the previous year in terms of visitor numbers. This is because January and February before the pandemic were particularly strong months for the Auchan Korzós. The main entrance of the shopping centers was crossed by more than 5% and the direct entrance to hypermarkets by an average of 7.6 % more visitors than in the same period last year.
During March, provisions to curb the coronavirus epidemic - including regulations on limited store opening and curfew restrictions - had a significant impact on the functioning of retail markets. Auchan Korzó was no exception. Although the number of visitors to Auchan hypermarkets did not fall short of the previous year even during curfew restrictions, the turnover of Auchan Korzó retailers started steadily declining. The negative peak was clearly in April. This month, most of the Auchan Korzó stores were forced to close, so tenant turnover showed an average decline of about 70% compared to the same period in 2019.
At the same time, different sectors of the retail sector have been affected differently by the crisis. While some tenants showed a significant 50-80% drop in turnover (e.g. in the fashion sector), other market players were able to increase their turnover compared to the previous year. During the Covid period, the best performing store types at Auchan Korzó were home furnishing shops, DIY stores, drugstores and money changers.
To reduce the financial loss of its retail partners, the operator of Auchan Korzó tried to lend a helping hand to those in a critical situation. Unlike other malls, Auchan Korzó did not oblige stores to stay open despite reduced revenues and waived 50% of the monthly rent for retailers that were forced to close. For stores that were able to stay open on a limited basis, individual discounts as well as free advertising opportunities were provided to increase turnover.
After curfew restrictions were lifted, life gradually returned to Auchan Korzó, and parallelly turnover began to grow. The shopping fever really broke out from the beginning of May, when stores were able to produce an extra strong, on average 84 % increase in turnover compared to the month of January 2020. The month of June was similarly favorable, although the growth rate was not as significant, but tenants still generated an average of 35% more revenue than in January.
It can be concluded that commercial markets are recovering since Auchan Korzó stores have not only reached but also been able to increase their pre-epidemic revenues in recent months. In June, the best-performing store types were home furnishing shops, fashion stores, drugstores, shoe stores, and fast-food chains.
The reason for the increase in turnover is that the course of pandemic has been far more favorable in Hungary than expected, so people’s confidence in personal shopping returned. As for the rest of the year, the operator of Auchan Korzó remains optimistic. In July, mind-summer sales as well as coupon days started, generating a further positive impact on both visitor numbers and revenue, so the negative economic impact of the pandemic is expected to primarily affect the first and second quarters.
Ceetrus is a global property player based in Europe, founded in 1976. The company was known as Immochan until June 2018. The company’s new name is constructed from the following words: “SEE” (see) “CITIES), “TRUST” (trust), “US” (we). Ceetrus has nearly 1,000 employees across 10 countries, 279 commercial sites including 76 “Aushopping” sites; 1 billion visits/year; a year; 10,700 retail partners; 130 social entrepreneurs supported by the Ceetrus Foundation; over 1,600 housing units acquired or built, 117,000 m² of offices acquired or built; 30,000 m² of leisure activities over the past 2 years. It aims to create responsible, sustainable, vibrant community spaces that contribute to the development of local communities and make people’s everyday lives more comfortable. In addition to its residential and multifunctional projects, Ceetrus Hungary Kft., the Hungarian subsidiary of Ceetrus is primarily involved in the management of Auchan Korzó.