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Sun 22 Mar 2020 02:25 PM

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Coronavirus: Collaboration between landlords, retailers key to preserving the Gulf region's retail sector

Dealing with fluctuations in consumer footfall, labour requirements, and rescheduled brand campaigns must be done together, writes Mohammad A. Baker, CEO of Gulf Marketing Group

Coronavirus: Collaboration between landlords, retailers key to preserving the Gulf region's retail sector

Mohammad A. Baker, CEO of Gulf Marketing Group.

Across the Gulf region and around the world, the retail sector—like many others—is facing an unprecedented situation as we confront the spread of the Covid-19 pandemic.

Public health must remain at the top of our priorities. This includes a commitment to protecting the health and safety of employees, partners, and customers. To this end, all of us should be closely following the latest guidelines issued by regional and international health authorities, working with partners across the retail value chain.

As a member of the Gulf’s retail sector, we also have a commitment to supporting its long-term vitality. Again, we are in a very dynamic situation. Each day there are changes that we must adapt to, and new issues we must try to resolve.

What is certain, however, is the critical need for cross-industry collaboration.

This collaboration is needed to protect public health - first and foremost - and also to support local retailers as they implement their continuity plans. For decades the retail sector has been a bedrock of this region’s economy. I have no doubt that it will continue to be as long as we navigate this new reality together.  

Government authorities have been very supportive to date in encouraging collaboration. In the UAE, for instance, senior officials from Dubai Tourism have worked in coordination with the Department of Economic Development in Dubai, and Dubai Chamber of Commerce to host discussions with leading retailers to review market issues and consider future actions. This is now happening regularly in Dubai.

Exceptional challenges

Underpinning that collaboration within the private sector must be a spirit of understanding and flexibility. Landlords and retailers alike are facing exceptional challenges. Dealing with fluctuations in consumer footfall, labour requirements, and rescheduled brand campaigns must be done together, with a shared sense of responsibility and agility.

Many retailers, for example, have signed annual or long-term rental agreements with landlords based on expected footfall. Of course these landlords are no longer able to guarantee the same level of footfall that they may have anticipated even a month ago. That reality alone should be bringing retailers and landlords together to review tenancy contracts and decide what is a fair and acceptable way forward.

The recent announcement from Al-Futtaim Group to set up an AED100 million fund for retailers to cover rent relief is a great example of how this collaboration is now happening. Similar actions will hopefully be considered by other leaders throughout the retail value chain.

Ultimately, I remain optimistic that we will preserve the region’s retail sector over the long-term. No one knows how long this health pandemic will last, but through close collaboration, we can better safeguard public health as well as the future of the industry.

Mohammad A. Baker is deputy chairman and CEO of Gulf Marketing Group

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