Coronavirus and the Retail Industry
- How has the retail industry been hit by COVID-19?
The emergence of the coronavirus has had a huge impact on the retail sector. Prior to the crisis, with falling high street sales and increased competition from online retailers, many businesses had already been struggling to break even. March saw the worst month on record for the high street, with sales and footfall both taking a massive hit. With all non-essential stores having been closed for a prolonged period, many businesses have already had to file for administration. A number of Debenhams stores in the UK and Ireland have already ceased trading as a result of the pandemic, and it is likely that they will not be the only ones to close their doors for good.
- How has the sector responded?
Despite the effects that the drop in sales is having on the retail sector, it has been great to see a lot of these businesses offering support to the coronavirus relief efforts, including a number of our clients. Back in March, PVH (Calvin Klein, Tommy Hilfiger) announced it would be committing one million dollars to the relief effort, as well as donations of product to support frontline healthcare workers in the US and Europe. Another of our clients, Leicester-based Just Hype, have gone down a different route: offering designer t-shirts, face masks and anti-bacterial kits for online purchase, with all profits being donated to NHS charities.
Elsewhere we have seen the likes of Barbour and Burberry repurposing their factories in order to produce gowns and other essential PPE items for NHS staff and patients, whereas John Lewis have collaborated with the British Medical Association to deliver care packages to frontline NHS workers, which include basic supplies such as deodorant, socks and snacks.
- How will retailers need to adapt?
As lockdown restrictions continue to ease and further ‘non-essential’ stores set to reopen on June 15th, we will all need to adapt to new ways of operating. Retailers will need to demonstrate that their premises are COVID-secure, and that they have systems in place to limit the chance of contamination. These stores will likely follow similar systems to supermarkets; with one-ways systems in-store, a limit to the number of shoppers with queueing outside, sanitiser stations at store entrances, and perspex screens at the paying tills.
The likelihood is that the effect of the coronavirus pandemic will continue long after lockdown has ended and social-distancing rules are eased. With many people set to lose their jobs, and others feeling less confident about their personal financial situation, it remains to be seen how long it will take high street retailers to fully recover from this period of reduced sales and decreased consumer confidence.