Landlord Negotiation Survey Results in the Post-Covid Landscape
A few weeks ago, Hairnews did a survey where we asked salon owners about their situation post-covid. We received responses from many salons in many different situations:
Most were in small neighbourhood centres (37%).
Some were in large centres or malls (22%)
Some were in the high street (17%)
Some were in private property (12%)
A few others were in small business complexes, large office parks, business buildings, and in hotel spas.
50% of the respondents were from Gauteng, 33% from the Western Cape, 10% from KZN and the remaining 7% from other provinces.
45% of salons were borderline viable pre-Covid, and only just affording the rental.
32% of salons felt their business was very viable before Covid, and that their rental was fair and affordable.
23% were on the verge of being non viable, with unaffordable rental being the main reason.
42% of salons said their landlord was very fair and reasonable during lockdown.
22% of salons said their landlord was unfair and unreasonable.
21% had to close down or leave the premises during lockdown as a result of the landlord.
15% of salons had to negotiate hard to get a fair outcome.
Post-Covid-19 After Reopening
48% of salons said they are in the same centre as before, and still viable under the new protocols, with the same rental as they were paying before lockdown.
30% of salons were forced to move or will be forced to move after being unable to reach a compromise with the landlord on rental.
7% of salons said they were in the same centre as before and still viable with a reduced rental.
A few others have:
Closed down due to landlord
Were still trying to negotiate at the time of the survey
Were borderline viable and still deciding whether to close
Were paying rent on a monthly basis but not at a rate that is viable long term.
12% of salons consulted their lawyer and received help from them in their negotiations.
However the majority negotiated by themselves, but received advice and guidance from:
Other salon owners
Pavlo Phitidis webinars
50% of salon owners said that business is slower than pre Covid, but they are optimistic that it is improving and that they can remain viable.
28% of salon owners said that business is much slower and they are pessimistic about remaining viable.
13% said they are seriously considering closing or relocating due to the downturn in business.
5% said that business is good and they feel the positive trend will continue
A few others had already closed or relocated at the time of the survey.
The survey asked for salons to comment on their situation and their perspective on landlords. We received the following comments regarding landlords:
Small, independent tenants should not have to cross-subsidise anchor tenants when it comes to paying for utilities for common areas - just not viable
Rental takes a huge chunk out of one’s turnover. Business is slow and we are working at 50% capacity. (half staff) Having said that business is so slow that even if were were at 100 staff, we would have staff sitting around doing nothing. It is really disheartening.
I’m optimistic and excited. Lockdown has forced change and thinking out the box. While there is a tough steep road ahead it is looking positive
We feel shopping centres should be more accommodating and look at rental based on turnover. They should change the way they operate in order to keep shops open and not have empty shopping centres.
My landlord flat out refused to reduce rent; and some industry brands have started selling to unqualified purchasers making our sales and services even harder.
Government should have made provision for this. Even guidelines. I have not heard of one spa that got help.
Thanks to all those who participated in the survey.