Trends & ForecastsMarch 17, 2020

Retail in State of Limbo as Coronavirus Disrupts Nationwide Operations

By SHAMONTIEL VAUGHN | Staff Writer‍

The coronavirus crisis is throwing retail businesses through an economic loop. Grocery retailers are forced to turn customers away and close early, so they have a chance to restock. Restaurants are removing chairs to keep customers from lingering inside. Apparel retailers are losing customers who no longer have the freedom to dawdle around. The online shopping industry is gaining new customers but facing new delivery obstacles. While consumers are being asked to increase social isolation, they’re depending on retailers to keep their homes stocked during work, school, restaurant and bar closures, too. And arguably, no one was quite ready for how the health crisis situation unfolded.

 

First challenge: Employees risking health for bills

For some industries, working from home makes sense. Technological advancements have made it so that there is little use to be in an office building. However, in physical retail stores, a good majority of the shopping experience involves cashiers, sales clerks and even stockroom employees to double-check for empty shelves.

But when the total of coronavirus cases in the United States went from 647 last Tues., March 10, to 3,487 total U.S. cases now, social isolation is the obvious way to get a handle on the infection numbers that have already led to 68 U.S. deaths. (The global total has skyrocketed up to 181K and 7K dead.) American retailers knew their stores were at risk, too, especially with news that a Walmart in Kentucky was forced to undergo an emergency coronavirus-leave policy after an employee tested positive earlier this month.

In an email from John Furner (Walmart US CEO), Kath McLay (Sam’s Club CEO) and Donna Morris (Chief People Officer), Business Insider reports that stores, retail clubs, offices and distribution centers under a mandated quarantine could receive up to two weeks of pay. Employee absences would also not count against attendance regulations. Full-time and part-time hourly associates who still are unable to return to work would also be eligible for up to 26 weeks of pay, even after the initial two-week period.

Target has also offered up to 14 days of paid time off for employees who have contracted the virus and/or are under mandatory quarantine. Parents are also getting waived absences for children whose schools are closed due to the coronavirus.

These decisions are especially significant considering four out of 10 hourly workers didn’t previously have access to paid sick leave. Thirteen companies changed their employee benefit policies to fix this dilemma. And that was even after an emergency paid sick leave bill was stalled by the Senate GOP.

 

Second challenge: Companies forced to turn customers away

The idea of turning customers away during working hours would be unheard of, if not for the coronavirus outbreak. But even with consumers going into social isolation and often being asked to work from home, Starbucks (an unofficial coworking space) has had to remove cafe and patio chairs at thousands of locations to operate as go-to only cafes. In high-risk areas such as New York and Seattle, and university campuses, stores have closed altogether. Open locations are encouraging Mobile Order & Pay methods, creating a “modified” condiment bar in all locations and “handoff” areas on a store-to-store location.

Restaurant chains like Dunkin’ Donuts are requiring crew members to re-take food safety training, halting food sampling and reusable mug programs, and canceling non-essential meetings and corporate travel.

Additionally, apparel, retail and wholesale stores are changing their hours to accommodate time to restock. Kroger, Publix, H-E-B and Walmart are using reduced hours to clean stores, restock and help protect the health of store employees. (Two employees at Kroger, one in Colorado and another in Washington state, have already tested positive for coronavirus.) Retailers are also putting a customer cap on individual purchases of toilet paper, sanitizing products and cold and flu medicine to better handle “panic buying.”

 

Shoppers cleared out toilet paper at an Orlando-area grocery store

 

 

Third challenge: Purchasing online isn’t as simple as it sounds

With consumers being asked to stay home in much larger numbers than usual, home essentials and food still need to be purchased. Mobile food delivery services have already taken steps to protect their contracted employees. In an email from Matt Maloney (Grubhub’s CEO), dine-in is down as much as 75 percent. Meanwhile, the Grubhub Community Relief Fund will donate funds to support drivers and restaurants impacted by the coronavirus outbreak. Contact-free deliveries will include calling and texting to let customers know they’ve arrived, and food will only be dropped off at their doorsteps.

For Amazon Prime members, this drop-off option is no different than a usual package. However, Amazon Flex drivers are facing a new challenge. In addition to an overloaded grocery system on Sun., March 15, a “systems impact” limited grocery orders to be packed and delivered in a timely manner from Amazon Fresh and Whole Foods Market. Drivers in San Diego, Calif., Seattle, Wash., Atlanta, Ga., and West Hartford, Conn., reported waiting more than 50 minutes for orders to be ready for them to deliver, reports Seattle Times. In turn, Flex drivers are worried that poor customer ratings would result in them being banned from deliveries and losing their own jobs.

It’s up to Amazon to analyze and act on this tech-and-timing related concern to avoid losing good drivers due to automatic deactivation. In the meantime, customers are being contacted and issued concessions when there are purchase and delivery complications.

 

The Takeaway: Coronavirus is of course not the first worldwide outbreak. Other major outbreaks include the 1918 influenza (more than 500 million people affected globally); the 2002–2004 severe acute respiratory syndrome (SARS) (8,098 global cases); the 2009 (H1N1) flu pandemic (undetermined global number in multi-millions); and the 2014–2016 Ebola (28,652 global cases). Even the seasonal flu affects more than 1 billion people annually. Once COVID-19 is contained, it would still be unrealistic to assume that this will be the last of health crises to ever happen. Change always comes. Brick-and-mortar stores, mobile technology advancements and online shopping have had plenty of their own changes. But what has not changed is our ability to continue to be optimistic and fight our way through trying times, getting stronger and more advanced along the way.