Hidden way out for retail: Escape rooms and Covid-19

Our team: Madeleine Holding

Most businesses have been affected by the economic impacts of Covid-19 but the pressure on the retail industry in particular has been significant. The high street is going to change as a result; some struggling retail businesses may cease trading altogether and those that survive may look to concentrate their store networks by opening fewer stores once social distancing rules are relaxed. The key question for retail destinations will be what businesses can pick up the units that are left empty as a consequence of the financial difficulties.

Before the lockdown, the United Kingdom was just beginning to tap into the international craze of escape rooms. HintHunt opened the first escape room in London in 2012 and are now a global chain with locations in 9 countries. The general concept is simple (although the escape itself might not be): a group of people are locked into a room and must solve a series of puzzles or find clues within the allocated time in order to escape. Some games do not involve locked doors and use virtual and augmented reality technology, and some require players to solve a fictional crime. It’s not just escape rooms that have grown in popularity but other experiential activities such as indoor mini-golf, cinema experiences and themed bars.

It may not be everyone’s idea of fun but they have been attracting teenagers, stag and hen parties, corporate team-building groups and families for years, which could make these activities attractive to retail spaces looking to draw-in more consumers. Escape rooms are often found in spaces which would not otherwise be viable, including basements and abandoned churches and factories, but as demand for more technology-focused escape rooms rises and the need for higher specification premises are needed, why not target empty retail space? On the whole, leisure offerings would seem a good fit in retail areas. Over the years, retail has transformed into a leisure activity with retail landlords seeking to draw-in consumers with food and leisure offerings and entertainment. Retail areas are also often served by good public transport links and parking.

Here are some other practical and legal considerations:

  1. The opening hours for escape rooms won’t exactly match retail shops. Most of Google’s top 10 escape rooms in London close their doors between 9 p.m. and 10:30 p.m. This might work well with retail spaces on late-night shopping days, but will landlords of shopping centres otherwise be worried about having groups of people around common parts after other retail premises have closed? In which case, retail premises with access directly onto the street might work better.
  2. Do the premises have sufficient facilities? Many retail premises will not have the benefit of customer bathrooms. Also consider the fire safety regulations that might apply when locking people in confined spaces. Landlords are likely to have strict covenants relating to compliance with these. Higher-tech escape rooms which don’t require customers to be locked in might also solve this concern.
  3. There is a permitted development right allowing the change of use of the premises from A1 (Shop) to D2 (Assembly and leisure) without planning permission. However, you must apply to the local planning authority for a determination as to whether the prior approval of the local authority will be required. This allows the local authority to consider the proposals, their likely impacts in regard to certain factors (e.g. transport and highways) and how these may be mitigated but is a much shorter and simpler process than planning permission. Local authorities are able to dis-apply permitted development rights so you should check this before making an application. You should not commence any work at the premises until you have a decision from the local authority.
  4. Consider whether a premises licence is required for any entertainment you will provide at the premises. You will also need to apply for a licence if you want to sell alcohol to your customers.
  5. Retail premises are usually subject to covenants not to carry out internal alterations without the landlord’s consent. If you plan to change your theme every so often, you should ensure that your alteration covenants are more flexible and allow you to do so without the landlord’s prior consent.

Incorporating escape rooms within retail areas might be a great way to draw-in consumers and increase footfall once  social distancing restrictions are relaxed. Escape rooms are not able to operate during the lockdown but could do so when consumers are allowed to socialise outside of their homes. Policymakers are considering extending the definition of ‘households’ (known as ‘social bubbles’) so that larger numbers of people are able to socialise together. The future of retail areas depends on them being able to offer something the consumer cannot get online and, whilst some creative escape room providers have been able to deliver online experiences, many people are drawn to the immersive nature of escape rooms.

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