It’s difficult to imagine that there has ever been a time when the retail industry has faced as many twists and turns as it has over the last two weeks. A mere fortnight ago things were relatively normal in retail-land as its inhabitants cast glances at a virus propagating overseas.
But since then the world has been turned upside down and the cycle in the UK has involved among other things: panic buying; the enforced closure of non-essential stores; massive surges in online food ordering; the move by many retailers to operate online-only; and the realisation by many businesses that the running of warehouses for e-commerce is untenable for health concerns and other reasons.
Despite the assistance of government with massive financial intervention, and the knowledge that there will be a time when we come out the other end of this virus-ridden period, there remains (not surprisingly) massive uncertainty in the industry.
The reality for some retailers – big and small – is that their mere survival is now being questioned and certainly the shape of many businesses will likely be very different in a few weeks from now.
The Centre for Retail Research calculates that as many as 20,000 of the stores that have been closed might never open again. The number of units that retailers need to operate at an optimum level of efficiency was already a big issue and the Coronavirus has placed even more focus on this already acute situation.
One of the key pressure points has been the shift of store sales to online, which has clearly been happening for some years but the virus has turbocharged this move – particularly when it comes to food.
Research from CGA found that 13% of people over the past two weeks have been getting delivery from a restaurant or take-away for the first time or more often than usual. And over 70% say they are likely to continue this behaviour once the crisis is over. Such a trend is being replicated in the grocery industry with the ordering of food from the supermarkets currently off the scale.
What has also been apparent over the past two weeks has been the strident moves made by many retailers to play an outsized role in their local communities. Many have gone well beyond simply being sellers of goods to people. Sadly, some others have pretty much done the opposite and then ended up doing U-turns following vitriol from a public who are not surprisingly massively sensitive to any injustice and profiteering at this time.
How much of a halo effect will be felt by those retailers who have been proactively doing ‘the right thing’ when we come out the other end of the virus remains to be seen. So often in the past the general public have too quickly forgotten those who’ve been most supportive at times of need and merely reverted back to choosing the cheapest option. Let’s hope this time it’s a tad different.
Clearly much will be different in a few weeks’ time. Normal will be a new normal and nobody at this stage has a clue what that will exactly look like. Everybody hang in there.
Glynn Davis, editor, Retail Insider