Photo: Getty Images/petekarici
Should retail close?
Apple, Nike, Warby Parker, Abercrombie & Fitch, Urban Outfitters, Glossier and Allbirds were among a number of retailers that have closed or announced plans to close their U.S. stores to help stop the spread of coronavirus.
Many also closed stores globally. Several indicated hourly workers would continue to be paid. In most cases, retailers are planning to reopen stores in late March. The retailers noted that online sales would continue.
“The well-being of our teammates and consumers is our top priority,” Nike said in a statement.
Apple has reopened its China stores but this weekend closed stores elsewhere.
“What we’ve learned together [in China] has helped us all develop the best practices that are assisting enormously in our global response,” said Tim Cook, CEO, in a statement. “One of those lessons is that the most effective way to minimize risk of the virus’s transmission is to reduce density and maximize social distance. As rates of new infections continue to grow in other places, we’re taking additional steps to protect our team members and customers.”
Many retailers had already closed offices and asked corporate employees to work from home.
“It’s an unfortunate but very necessary decision,” Susquehanna International analyst Sam Poser told CNN about the closures. “How important are a few days of business versus the health of your people, the health of your employees and customers, and your brand reputation?”
On Sunday, Starbucks became the first food establishment to eliminate seating in locations in North America and shift to an entirely to-go model. Locations in “high-social gathering areas,” including malls and university campuses, will be temporarily closed. Stores in communities with a high number of COVID-19 cases will see reduced hours or closure.
Rossann Williams, president of Starbucks’ U.S. business and Canada, said in a statement, “As we all know, the situation with COVID-19 is extremely dynamic and we will continue to review the facts and science to make the proactive decisions necessary to protect our partners, customers and communities.”
Overseas where the number of cases is significantly higher, Spain became the second country in Europe after Italy to impose a lockdown and order people to stay at home. France ordered the closure of restaurants, cafes, movie theaters and other nonessential shops.
- Nike Statement – Nike
- Apple’s COVID-19 response – Apple
- Coronavirus Prompts Abercrombie, Nike, Others to Close Shops – The Wall Street Journal
- Nike, Urban Outfitters and other retailers shuttering stores temporarily because of coronavirus – Q13 Fox
- Nike is closing all of its stores in the US because of the coronavirus outbreak – CNBC
- Millions confined to homes after Spain and France impose coronavirus lockdowns – Financial Times
Discussion Questions
DISCUSSION QUESTIONS: Should all non-essential stores temporarily close to counter the spread of coronavirus? What obvious and less obvious factors should weigh into the decision?
Poll
BrainTrust
Michael La Kier
Vice President, Brand Development - IGA, Inc.
Georganne Bender
Principal, KIZER & BENDER Speaking
Yes, I believe that non-essential retailers should consider closing some of their locations for a two-week period. In the retail stores we track, some categories are seeing store traffic decreases in the 30 percent – 40 percent over this past weekend, and no doubt these declines will continue as quarantines and social distancing continue.
Every citizen and business needs to play a role in containing the virus, and minimizing exposure in retail environments is one of the ways to do this. While the sales impact will be harsh – it will be for everyone – some retailers may be in a position to use this time to do internal staff training, re-merchandising stores or other activities that don’t require interaction with customers. There are no good answers to many of the questions we have, however if we all focus on making the best of the situation, we’ll all be better off.
Hard times require hard decisions. This is an unprecedented period in the history of the world. What seemed crazy two weeks ago is not out of the realm of possibility. The financial impact of retail store closings is immense, but this seems inevitable. Not acting now can literally cost lives, maybe not of retail associates, but of customers. However, the issue is not the same for Nike and Lululemon as it is for the majority of retail establishments that are small- to medium-sized businesses who can’t afford to shut down and still pay employees.
Of course they should. This is a once-in-a-century event. Keep e-commerce operations open as long as you have enough automation in the DC to keep the number of people close together to a minimum.
How is this even a question?
How is it a question at all indeed. In the absence of any information to the contrary excess caution is the right path.
Your doors have already been shut, you just don’t know it yet. This has to be a WE not a ME problem. Though you and your family may be fine, your actions may determine someone’s outcome in the ICU in 14 days. The problem continues to be no leadership from the top which is making every state, county and person have to figure it out on their own. If you are planning on staying open, consider reading my post Retailers: How To Deal With Coronavirus.
It’s impossible to reconcile business-as-usual retail with social distancing, quarantines and lockdowns. We need to be taking every lesson possible from China and Europe. The U.S. is behind the curve at this point, as evidenced by pics over the weekend of spring break partying in Florida. Doctors and health care professionals need to run this show, not politicians. Especially not politicians taking three-day weekends at precisely the wrong moment.
Until the nation’s experts determine the guidance for retailers (because my opinion doesn’t matter here), my wife and I are buying gift cards for ourselves at the local places we regularly frequent to be used at a later time (e.g., restaurants, small retailers, etc.) to do our part to help keep these small businesses afloat during this crisis. If everyone does this, there will be a steady flow of cash for these small business owners to pay their staff, etc. If the retailer doesn’t sell gift cards online, we simply called the store and they had one ready when we walked in.
Excellent suggestion with respect to the gift cards.
Whether to close or not, has become increasingly moot by the hour. Things are crawling back to normality in China, and that is hugely encouraging. It also means the lockdowns and quarantines are working. It is quite possible that retailers will be mandated this week to close down. Last night Illinois and Ohio mandated restaurant closures. Other retail is not too far away.
Michigan has just announced a similar program. Any place with a food license has to shut down ALL seating effective 3:00 p.m. today. Take outs/pick ups are still allowed. I assume that this will become standard practice across the country. Some CDC officials are talking about eight (versus two) weeks of these kinds of policies. Assuming that bad — but not worst case — scenario is true, the independent foodservice business is likely to be gutted before this is all done.
Absolutely they need to close to help with social distancing and slow the spread of this virus. Profits are not more important than human life and every business needs to step up and do the right thing. My ethics professor in business school pounded into us the question of “will this harm the least among us?” to help us check our decisions. Every business has a moral responsibility to protect the least among us, in this case, those who are at risk for serious complications from the virus. I have family who work as ER professionals. They are reporting that their hospital ICUs and ERs usually operate close to capacity. A wave of sick people will overwhelm them and limit what they can do to help the desperately ill. We need to step up as a community and do our part to protect those who need it.
I don’t see this as a really debatable option. Coronavirus-mania will result in fewer store visits anyway. Outside of the noted essential stores, other stores need to reduce their customer density and maximize social distance. This is a great opportunity to expand a retailer’s online business (families will be sheltered in place and how long can dad watch sports replays?). In addition this is a terrific opportunity for foodservice establishments to develop a viable takeaway business that replicates the quality, temperature and fresh made taste of eat-in dining. Crazy times indeed, but also a time for new opportunities, especially if you take a different perspective on your business.
Yes, all non-essential stores until we have more insights as to the nature of the coronavirus, and why it has spread so aggressively over the past week. These are truly unprecedented times for our always-connected and socially driven society, however, sacrifices have to be made by all to contain the spread, and do all we can to flatten the curve.
The unfortunate outcome of these important decisions is the lack of paid sick leave for the front line store associates, who will be impacted significantly. Thankfully, there are leading retailers such as Patagonia that are shutting down their operations but also committing to paying their employees during the store closures. This is the type of corporate responsibility we need, in addition to the reassurance and financial assistance from our federal government to get us through this crisis.
Brandon, I’m not sure it is spreading so aggressively. It may just be that the incubation period is past and that we are now seeing its impact. Also, testing is starting — albeit too late in the game — and so the number of reported cases will hockey stick. I’m not saying COVID-19 isn’t insanely contagious — which it clearly is — but that we have been lulled into a collective false confidence since people were walking around spreading the virus for weeks even though they appeared asymptomatic.
Good points Ryan. The unfortunate situation is that there was a complete lack of COVID-19 testing available so the anxiety levels are rising as the tests become readily available. It is shocking to see how things have escalated, however, much of this could have been mitigated if the quarantine was implemented weeks ago
The first challenge is to define what makes a store “essential.” That’s going to be a moving target based on what someone might need, and the perceived urgency of it. Food stores are likely essential. But what about stores like Best Buy, Home Depot, and Staples? If you need a new mouse, faucet, or printer paper, those are suddenly essential.
Operations should be limited to non-contact and no risk of spreading the virus. If a retailer can stay open with these restrictions, then staying open might work. Certain types of retailers closing will introduce undue burden on the public – such as grocers, fuel and pharmacies. The concept of social distancing is counter to the motives of most retailers to increase foot traffic, but the Covid-19 crisis is a scenario where it’s prudent to be cautious – for both the customer and the employee. There are no less obvious factors. Even the survival of a company doesn’t justify risking human lives.
Everything is obvious. There is no debate. Store staff lives count too. For those who may disagree, we are all interconnected in this pandemic.
This is such a tough decision because so many will be left without a livelihood in these uncertain times. Our phones and emails have been blowing up with calls from retailers who are scared and don’t know what to do or where to turn. My gut says yes, all unnecessary retail stores should close. We have no idea where the this virus will take us so it’s better to stay safe and healthy.
MGM closed all of its casinos and hotels last night, when a huge company makes a decision like that I’d say that’s a pretty good sign that it’s time to go on hiatus for a while.
There is no question in my mind. Of course non-essential stores should be closed. If we err let’s err on the side of caution. If there is no reason to go shopping the best thing is not to go and not to take a chance. Unfortunately, this is the time we are living through.
Closing is a sensible step to protect staff and customers. However it is necessary for essential stores (drugstores, supermarkets, etc.) to remain open for as long as possible – their skills and services are desperately needed to ensure mass panic doesn’t set in.
However, as laudable as shutting up shop is, I have two concerns.
Any government-mandated shutdown (which may be coming) needs to also focus on the fall-out. How will employees be paid? How can the viability of firms be protected?
The second concern is, will closures actually help? If everything shuts down and cases fall, they will only spike again once things are open. Can we really keep this cycle going on for over a year until a vaccine is developed or most people have immunity from having caught the disease?
There are no easy answers to this, but it’s good to see so many retailers voluntarily taking a lead.
Neil, I wish your post had been closer to the top because it is a perspective everyone should keep in mind. It is the right thing to do right now if you are non-essential. But it is also the right thing to step back and take a look at how this type of event might play out again in the future. Now is the time to start looking at alternative modes of operation as some have suggested in this thread. It doesn’t mean, shut down and tell me when to come back. We are all in this together. For my 2 cents. And, of yes, I love the gift card idea!
The real question is, why haven’t they closed already? I am rarely an alarmist, but I do think we need to brace ourselves for a very rough few weeks. The only countries to see things slow down are those that took aggressive measures early, including closing down all non-essential retail. Without tests, we have had no idea where the hot spots have been, and tens of thousands are now likely infected without knowing it — and walking around malls and shops. As more tests become available, I fear we will see a very big spike in the number of cases in the coming days. We have to do everything we still can – now – to minimize the impact on our healthcare system, which includes closing non-essential stores.
The only way to get through this as quickly as possible is to do the difficult work now. Yes, all non-essential stores should close in order to get back to business as usual as fast as we can.
Of course non-essential stores should close up shop. It is the right thing to do for the employees and shoppers. Companies will take a hit but as long as the workforce is able to remain employed, there is a bounce-back opportunity later in the year.
All non-essential stores should close to support social distancing. While the ramifications of this are huge, we are in unprecedented times and difficult decisions need to be made.
There is no alternative to shutting down. Every day counts and every day will save (in particular elderly) people’s lives. Here in Switzerland, we expect a national shutdown of all stores (except grocery, drugstores, and pharmacy) soon.
Notwithstanding policy makers acknowledging the impact of Covid-19, drastic measures are necessary to flatten the curve and reduce the deleterious effects of this once-in-a-century pandemic. Despite the deep economic effects, shutting non-essential retail now is a must to avoid truly draconian actions later.
Of course non-essential brick-and-mortar retail (including restaurants, bars) should close for at least two to three weeks, maybe longer depending upon what science dictates. Perhaps for the first time we will see a real stress test of retail e-commerce and supply chain capabilities – this is a sudden unplanned event, unlike Black Friday or Cyber Week.
Yes. Retailers should close except those whose goods are critical for daily life (e.g. supermarkets). For those, it seems we need a way to limit the number of shoppers at a time.
Years back I wrote a post about business’s biggest weakness: Improvisation. And it’s at a time like this when improvisation skills are most needed. For a retailer like NIke — closing is not a question.
For a supermarket? It’s time to learn as we go. There are no hard and fast rules for allowing people to obtain the goods of basic living within a pandemic.
Note that improvising is NOT out of control or ignorant of the rules. Rather, improvising in music or in sport requires innovative thinking within the rules of the road — to achieve something we’d never have arrived at without it.
“Practicing on the Bandstand: Some Thought about Miles Davis, Improvisation, and Business.”
The faster we respond and do what is suggested, the faster we can get back to normal. Restaurants, bars, theaters, busy retail stores — really, any place that hosts large groups of people — need to consider what’s best for the long-term, not today. Non-essential stores can close, yet they can still maintain an online presence. We need to change as needed. What we think is acceptable today could change tomorrow. Remember the old saying, “This too shall pass.”
My answer would depend a lot on what is termed “essential.” Apple isn’t, a restaurant probably is. And of course to a small business owner, the answer is likely to be “mine.”
Historically, people aren’t very good at judging risk, and this seems to be the ultimate test, with “we lose” being the outcome regardless of what we do.
These are radical times in which we all have to make very hard decisions. We can fight this thing for three months and then find ourselves in a repeat fight, and then another. Tough decisions must be made to stop this viral threat and re-birth our way of life.
Retail stores need to make a decision and stand by the decision. Payroll budgets are being cut to the bare minimum. Soon we will have four people working in a department store. The biggest frustration for store level managers is not knowing if we are closing or not. (For reference, I am an hourly manager who was salary before Obama’s plan to extend overtime for salaried employees failed. The company I work
for didn’t look at individual pay, they looked at store volume.)
If I was told we are not closing unless mandated by State or Federal governments, I would feel more confident in using paid time off to offset the dramatically shrinking payroll budget. This would allocate more hours to my team and provide more coverage on the sales floor.
I’ve never felt more selfish for saying “no I need to work 40 hours just in case we close.”
I want to my store to stay open. I want to know that I can help my team members and company by using PTO to offset the payroll budget without losing a week and being told we are closing for two weeks. Right now, I have to follow the lead of the Home Office team and think about myself and my income first.