Non-Traditional Retail Opportunities for Traditional Investors

“Be Fearful When Others Are Greedy and Greedy When Others Are Fearful”

This is probably one of the most overused – and misinterpreted – quotes from the revered Warren Buffett. It has become something of a cliche, but one that has served bold property investors in Ireland well over the past turbulent decade. We have learned that opportunities exist in the midst of chaos and uncertainty, unfortunately, these opportunities can only be confirmed in retrospect. How many people reading this can still remember the best deals they never made? Anyone who turned down a Georgian property in Dublin 2 when they were selling below €650,000 will probably relate to this.

In the past, investment in retail has fallen squarely with large-scale portfolio investors or with local area specialists. And the challenge is not just felt on the investment side, occupiers are struggling to be relevant in this increasingly digital world. Earlier this week Ronald Quinlan reported in the Irish Times that ‘Vodafone [is] to open first Irish ‘experience store’ on Henry Street’ and they will pay close to half a million euro per year to make this happen. Get used to that term, experiential retail will become the norm for any brand hoping to compete off-line, using traditional bricks and mortar premises. Brands need to give people a reason to get offline and off their sofas – it has to be about more than the product offering – and retail developers and investors need to get to grips with what this means, quickly.

James Quinlan, also writing in the Irish Times this week, explored the opportunities for retail. He declared that ‘The future of retail will be out of town and online’. That might seem like a fair assessment of the situation, indeed, that’s a headline that could have been written pre-pandemic. But it’s not the full picture. There will almost certainly be a deepening of trends towards online shopping and click-and-collect services, but that was happening anyway. What has changed most significantly over the past three months is the increased adoption of emerging retail tech solutions by small, local and decidedly traditional corner shop owners who have found themselves relevant once again.

The unprecedented shutdown of Ireland’s retail sector has led to high profile closures and exits of global brands from Ireland, however, small local retailers are experiencing a boom for the first time in over a decade. Paul McNeive said it best in the Independent this week, writing ‘The retail market has taken a pounding from the pandemic, but rapid change will create winners as well as losers’. The food and grocery sector has been the big winner, with sales up more than 25 percent. For the first time in years, local retailers are getting more than their fair share of this buying bonanza. And for their part, they are working with under-employed taxi drivers to introduce deliveries for the first time, aided by new technology and pandemic-responsive apps.

Maybe now is the right time to take a second look at all the unsold retail elements of multi-use schemes that exist in almost every market town around the country and re-evaluate the opportunity.

Ian Lawlor
086 3625482

Managing Director / Business Development
Lotus Investment Group