eKourier July 2020

FEATURE

It’s been an unusual few months to say the least. The onset of the pandemic forcing people to work from home, schools to close, students to learn online from home and many businesses to close, as well as the closing of state borders and absolutely no international travel. FIRM AND CONFIDENT IN POST-PANDEMIC TIMES

W e are now slowly getting on the other side of the health crisis and by world standards Australia and New Zealand have fared very well. As life returns to some kind of normal, we are now facing the economic crisis from the decision to close, or as they say pause the economy. The Australian Government has already conceded that we are in a recession with a retraction in GDP of 0.3% on the March quarter results, and the prediction is a significant drop in the current quarter. Predictions on unemployment are a little uncertain as we start to see businesses once again opening their doors, but there is a strong sentiment that’s it’s going to be much higher. How long and how deep this recession goes is something I’ll leave to the economists to debate. We have all felt the impact of the pandemic one way or another, and it has definitely led to a change in consumer behaviour. While social distancing is the new norm, online has accelerated, the buying process delayed, and we may have more price- conscious customers. But we should not lose confidence in our industry, our company, our product and the way we do business.

Aussies and Kiwis are looking for local and independent brands and business. According to the GWI’s (Global Web Index) Coronavirus research, 35% of Aussies said they will buy from a local brand after the outbreak is over and 42% of Kiwi’s also agree that being local and independent will influence their buying decisions, which is good news for a family-owned Brand like us. According to Google’s internal tool based on search data, Covid-19 hasn’t impacted the industry. In fact, demand has increased by over 10% YoY. Therefore, our industry and our jobs are certainly in a much better position than many other areas.

We saw similar trends in the 2008 Global Financial Crisis. While many industries and companies struggled, our company not only didn’t suffer but, on the contrary, our business grew ~12%. Although we’ve recently had a couple of flat weeks, in many locations, reservations and move-ins are already exceeding last year figures. At the same time, search volumes and web traffic are recovering at a steady pace. We are also seeing new revenue streams as a result of consolidations, cost reductions and downsizes. It may be true that tenants have become more price-sensitive due to the

economic uncertainty, but it is also true that the need for self storage will remain healthy; downsizes, changes in relation- ship status, wine connoisseurs, car collectors, business inventories, tradies, renovations, births and inheritances will keep occurring. Life will keep occurring. Storage rent will continue to be only a small portion of household’s incomes (less than 3%) but an essential part of it. But of course, we are conscious of the stress many of our customers are going through. Therefore, we have paused

13 Kennards Kourier July 2020