The development of a COVID-19 vaccine is positive news for retailers as they find themselves once again on the front lines of the surge in the pandemic. That optimism will eventually lead to more accurate and aggressive planning for the first and second quarter of 2021. But the industry finds itself threatened again by lockdowns and the dreaded essential vs. non-essential classifications.
During the first series of lockdowns in April and May, “essential” retailers were allowed to stay open. The criteria were inconsistent from state to state, but seemed to center around food and beverage. If a retailer sold food, it was essential. If it specialized in apparel, it was deemed non-essential. The fairness (or lack thereof) of that edict has already sparked debate in the U.K., where a lockdown mandate is in place until Dec. 1.
“Some non-essential retailers have complained that some of their competitors, many of them larger in size, are able to continue selling non-essential items, taking advantage of the fact that smaller shops have had to close their doors to customers,” said The Journal, an Irish news site. “For example, toy shops are only allowed to operate click and collect or delivery services for the next weeks. Meanwhile, supermarkets, many of which also happen to sell toys, can remain open to customers. If the supermarket continued selling toys, that would be an unfair advantage, or so the argument goes.”
This time around the argument has drawn the attention of the National Retail Federation (NRF), which is U.S.-based but global in scope. On Tuesday (Nov. 10) the NRF filed a request under the New Mexico Inspection of Public Records Act to release information related to new restrictions placed on retailers and eateries, as the state experiences a spike in COVID-19 cases.
“Since the onset of the pandemic early this year, New Mexican retailers have made the safety and security of their customers, employees and local communities their highest priority,” NRF Chief Administrative Officer and General Counsel Stephanie Martz said. “Retailers across the state need and deserve a transparent process for re-opening and maintaining business operations. Furthermore, the state’s new measures burden rural communities by decreasing access to essential items if local businesses are ordered closed.”
The NRF request was clear that that its members are committed to following all federal, state and local public health guidance and recommendations and points out that retailers have made “significant investments” to ensure the safety of customers. It is asking that the New Mexico government, and by extension other states that have or may lockdown, communicate the process by which decisions are made.
In terms of actual impact the vaccine could have on the short-term prospects of the retail industry, the spotlight has turned on to grocers. Kroger, Amazon, Target and Walmart have all seen huge increases in business from online and offline shoppers during the pandemic. A new report from Bain & Co. warns that the pace of these gains could slow after shoppers’ habits and attitudes change toward pre-pandemic levels.
The sector’s revenue has risen by as much as 10 percent year over year in 2020, according to the consulting firm. That rate may shrink to 2 percent to 5 percent next year.
“The dilutive shift to online grocery has accelerated, and omnichannel leaders are locking in shoppers to subscription services,” according to the Bain report . “Discounters continue to build stores, lowering prices and squeezing margins. Consumers still want more convenience, more value, more environmental and social impact. Restaurants — such an easy alternative to eating in before Covid-19 — will regain traction at some point.”