How Landlords Can Curate Vacant Retail Spaces to Meet Evolving Consumer Needs

As many regions begin their post-pandemic recovery, landlords are tasked with transforming vacant retail spaces to meet the evolving needs of consumers. With retail facing new challenges, landlords must rethink how they use these spaces and repurpose them for more social, experiential, and dynamic uses.

The Impact of the Pandemic on Retail Spaces

The retail sector has faced significant challenges due to the pandemic. In the UK alone, over 1,000 chain outlets closed within the first six weeks of 2021, and vacancy rates in UK shopping centres rose to 17.1% by the end of 2020. Retail parks saw vacancies increase to 10%, while the US experienced a rise in regional mall vacancy rates, which climbed from 10.5% to 11.4% during the same period. Meanwhile, e-commerce has continued to rise, with online spending in the UK projected to hit £141.33 billion, a 34.7% increase from 2019, and now accounting for more than 30% of total retail sales.

As consumers continue to shift towards digital shopping, landlords must adapt by reimagining their physical spaces. Rather than focusing solely on traditional retail, they should curate these spaces to deliver unique, social, and engaging experiences that align with the new priorities of modern consumers.

1. Renting to Local Businesses

One effective strategy for landlords is offering short-term leases to local businesses instead of long-term agreements with large, mass-market retailers. This approach not only supports the growth of independent businesses but also meets the increased consumer demand for local experiences. According to a Mastercard study, over 65% of UK consumers have developed a new appreciation for supporting local businesses, particularly younger shoppers. By curating spaces for small, independent businesses, landlords can foster community engagement and offer unique leisure experiences like pottery workshops or microbrewery tastings, as seen in Joy City North Mall in Shanghai, which features a variety of interactive, creative workshops.

2. Food Halls and Markets

As the focus shifts from pure retail to a more experiential model, landlords should embrace food halls and markets. Dining spaces are increasingly becoming a core part of the retail experience, with food retailers set to occupy 25% of gross leasable area (GLA) by 2025. Offering opportunities for international and local food startups not only diversifies the mall’s offerings but also provides a fresh and dynamic environment for shoppers. Food courts and marketplaces can create community hubs that attract both shoppers and visitors seeking new culinary experiences.

3. The Rise of Entertainment and Leisure

Today’s consumers are seeking more than just shopping—they want **entertainment and leisure experiences that offer relaxation and engagement. Retail spaces are evolving into leisure destinations, as demonstrated by Respublika Park in Ukraine, which boasts 30,000 m² of space dedicated to Virtual and Augmented Reality experiences, party rooms, dining options, and even an indoor theme park with a rollercoaster. Landlords are now emphasising entertainment and leisure as key components of their offerings, shifting away from purely retail-based marketing.

4. Mixed-Use Spaces

The post-pandemic world has also seen a rise in demand for mixed-use spaces, where dining, shopping, living, and working coexist. Consumers are now more likely to prioritise convenience, and well-designed mixed-use spaces cater to this need. These spaces combine biophilic design, residential living, and vibrant social areas to create environments that appeal to consumers looking for multifunctional, walkable destinations. Incorporating these elements will ensure that retail developments meet modern needs and foster a sense of community.

Conclusion: Reimagining Retail for the Future

The future of retail lies in curating spaces that are more than just places to shop. By embracing local businesses, food markets, entertainment hubs, and mixed-use spaces, landlords can create destinations that reflect the evolving needs of consumers. These spaces not only drive foot traffic but also increase community engagement, revenue, and asset value.

To read more about how landlords can adapt and transform retail spaces, check out our full articles in Retail Leisure International and A1 Retail.