Retailers across the United States continue to grapple with the coronavirus pandemic, which has led to widespread store closures as well as significantly reduced business operating hours amid federal stay-at-home orders.
According to analytics firm GlobalData, nearly 4.8 billion square feet of retail space — roughly 55% of total retail space — has been shuttered across the country. That represents more than 258,300 units closed — almost 61% of all units — minus restaurants and service operators such as gyms and spas. The shutdowns have inevitably shifted the U.S. economy, from decimating the workforce through furloughs and endangering already-struggling businesses to forcing retailers to make adjustments to their omnichannel strategies.
While a number of retailers have extended pay to their employees for the duration of a two-week shutdown until the end of March or early April, the indefinite closure of brick-and-mortar stores across the country has led most businesses to make the difficult decision to furlough workers. Since last week, several of the nation’s biggest chains — including Nordstrom, Gap and Kohl’s — have announced that they would temporarily lay off the majority of their store associates. Some retailers have also tapped into their credit lines to stay afloat, and a growing number of executives have announced that they will take pay cuts or forgo salaries for the time being.
Still, some retailers’ current financial positions suggest that they could be at risk of going out of business as a result of the COVID-19 impact. For example, even before the coronavirus hit the United States, market watchers already appeared to have lost faith in Macy’s and JCPenney. Retail analysts have also been down on J.Crew for some time as it navigates a business rife with executive turmoil and disappointing financial results and Neiman Marcus remains reportedly “several weeks away” from a potential bankruptcy.
In the midst of the pandemic, many retailers have redirected resources toward omnichannel — albeit with uneven results. Shopping habits amid social distancing have led to a surge in contactless services. According to a recent study by Adobe Analytics, buy online, pick-up in store (BOPIS) orders — including curbside pickup — surged 87% between late February and March 29, compared with the same period last year. But these advances, according to insiders, haven’t been enough to offset brick-and-mortar declines.
Meanwhile, as apparel and footwear retailers bear the brunt of the outbreak, businesses selling essential goods are thriving — with some even fortifying their workforces. Walmart, Amazon and even Dollar Tree are staffing up by the thousands to serve customers’ needs for groceries and essentials as they stay home to help flatten the curve.
Was Furloughing Employees the Only Option Retailers Had Amid the Coronavirus Crisis?
Retail Sales Could Suffer Long After Stores Reopen