A surge in COVID-19 infections has led to a spate of renewed lockdowns and restrictions on nonessential businesses just before the holidays — a key period for retailers across the United States. But, unlike the dire situation that plagued the country in the spring, fashion and footwear companies appear to be more prepared for the unprecedented shopping season ahead.
In March and April, as the pandemic took hold in the U.S., thousands of retailers from coast to coast temporarily shuttered their doors, completely halting foot traffic to stores and forcing many employers to furlough or lay off their workers. Top executives took pay cuts or opted to forgo their salaries, while many companies dug into their revolving credit facilities to stay liquid.
Since then, hundreds of thousands of small businesses have closed up shop for good, leaving empty storefronts on some of the country’s most frequented shopping thoroughfares like Chicago’s Magnificent Mile and New York’s Madison Avenue. Although big-box chains and other essential businesses got a boost from panic-driven shoppers, some boldface department stores and specialty chains — counting J.Crew, Neiman Marcus, JCPenney, Brooks Brothers and Century 21 — sought bankruptcy protection in hopes of emerging in a better financial position amid the new normal.
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Over the past few months, however, many retailers across the board have learned to adapt: They embraced contactless options for customers, shifted resources to digital, evaluated their strategic partnerships and beefed up their workforce or rewarded staff who are on the front lines. They also implemented safety protocols at stores and proactively prepared their inventories to satisfy early online orders as holiday shopping begins earlier than ever this year.
Yesterday, for instance, Walmart revealed that its customers were once again returning to stores for paper goods, cleaning supplies and dry groceries — products they heavily stocked up on roughly seven months ago — but shared that it was in a better position to keep up this time around.
“It feels to me like we’ll work through this period of time better than we did in the first wave,” president and CEO Doug McMillon said in a conference call for the retailer’s third-quarter earnings and sales, which trounced analysts’ expectations.
The big-box giant has also made changes to its holiday plans — which competitor Target as well as chains like Old Navy and Kohl’s have also done (undoubtedly influenced by Amazon’s Prime Day, which moved from its usual date in July to mid-October). Beyond providing curbside pickup and buy online, pick-up in store services, these retailers and others have already begun offering markdowns via e-commerce channels to encourage customers to do their shopping from the comfort of their own homes.
Companies are also staffing up at stores to accommodate an influx of shoppers, but also at distribution centers to prepare for the increase in online demand. According to the Labor Department, the retail sector added a total of 103,700 jobs last month — with employment rising by 12,600 at clothing and clothing accessories stores, 10,000 at general merchandise stores and 8,500 at non-store or online retailers.
According to researchers at Johns Hopkins University, more than 11.3 million people in the U.S. have contracted COVID-19, while at least 248,800 deaths have been recorded. Within the week alone, new coronavirus-related mandates were enacted in several states to help curb the spread of the outbreak. Some governors have announced harsher restrictions on retailers’ store capacities and hours of operation, while others have kept their current mitigation efforts in place.
California, for instance, has rolled back reopening plans after cases exceeded 1 million last week. As part of Gov. Gavin Newsom’s Blueprint for a Safer Economy, 41 of 58 counties are now in the most restrictive purple tier, which means retail stores must limit capacity to 25%. One of those affected businesses is SAS Shoes, which has multiple locations throughout the state and was shuttered for a month and a half during the initial round of stay-at-home orders starting March.
“Our styles at SAS really caters to older people, and a lot of them are on lockdown,” said a salesperson at the retailer’s outpost in Firehouse Plaza Shopping Center in Ventura, Calif., which is one of the counties that has recently fallen into that tier. “It’s been pretty slow, and we’ve lost half our business… I don’t expect [consumer traffic] to change during the holidays.”
At Shoe Mill, which has seven locations in Oregon, traffic has yet to return to pre-pandemic levels since it reopened to the public in mid-May. The state is currently under a two-week freeze, which started Nov. 18 and ends Dec. 2, with retail capped at 75% capacity.
“We’ve been operating with limited capacity, minimal staff and very aggressive sanitation techniques, and the proposed shutdown in Oregon hasn’t really changed that,” said Joseph Fairbanks, store manager at the retailer’s Bridgeport Village branch in Tigard. “I’ve been at the store for more than three years and at Shoe Mill for more than eight, so I have a pretty good gauge of how to manage traffic flow in the stores, and we’ve never reached a point [during the pandemic] where we’re at capacity, even on our busiest weekends.”
The East Coast is also seeing its share of restrictions: In Philadelphia, Head Start Shoes — a high-end Italian designer boutique that has been operating for 42 years in the historic downtown district — hasn’t seen its regular flow of clientele since opening back up in June. The city is currently limiting the number of people allowed in retail stores to five people per 1,000 square feet.
“Our foot traffic has definitely been way off,” said the store’s owner, who asked not to be named. “There’s no tourism and no business people. Being a store in Center City, that’s what we’re missing — all the people.”
He added, “I hope that everything gets better for everybody. If this continues on, we could be shutting down.”
The family-owned Hanig’s Footwear near Magnificent Mile in Chicago — where retail can fill up to 25% of a room’s capacity — allows in only two people or two groups at a time in stores during the day. Although its suburban location in the city of Wilmette had shuttered for a couple months back in the spring, the unit on 875 N. Michigan Ave. remained closed for five months and only reopened in mid-August.
“We didn’t know if we were going to open back up or not,” manager James Williams told FN. “Now, we don’t know again how it’s going to be [in the next few weeks] because the government is implementing another soft lockdown starting Friday. It’s already been rough the last week or so because everyone is encouraged to stay in and go out only for essentials.”
Still, it remains unclear whether the recent COVID-19 wave will lead employers to dismiss their employees once again and customers to pull back on their spending. Yesterday, the U.S. Census Bureau reported that Americans boosted their buying in October for the sixth month in a row, but the pace of overall retail sales grew only a slight 0.3% from the prior month due to a spike in coronavirus infections and uncertainty ahead of the U.S. presidential election. (Former Vice President Joe Biden and Sen. Kamala Harris have since been declared the next President and Vice President of the United States, defeating incumbents President Donald Trump and Vice President Mike Pence.)
In a statement looking ahead, National Retail Federation chief economist Jack Kleinhenz said, “The rise in COVID-19 cases continues to be a factor that weighs on consumer perceptions, sentiment and spending and there could be retrenchment if we cannot thwart this latest wave. Nonetheless, retailers are well prepared to safely fulfill holiday shopping lists, and the October results suggest so far, so good.”