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Fortnight can be a long time in retail

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

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