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Retail During COVID
The COVID-19 pandemic has ravaged the nation’s retail industry. During the national lockdown, at least 630,000 non-essential retail outlets were forced to close. Many well-known department stores declared bankruptcy due to their unsustainable levels of debt entering the pandemic. Unfortunately, the struggles resulting from lockdowns may only be the beginning, as shifts in consumer behavior leave retailers questioning the right strategy to stay afloat. To stay viable, retailers will need to find creative ways to weather this uncertainty in the short-term and be ready to adapt to new consumer preferences in the post-pandemic world.
Although economists now state that the recession began in February, retailers will reflect upon April as the month when the trouble began. U.S. retail sales plummeted by 12.6% in April 2020 as non-essential retailers were closed due to the coronavirus pandemic. Unsurprisingly, non-store retailer sales increased by 9.3% in April as people shopped online from home. E-commerce sales account for about 10.0% of total retail sales and this share is anticipated to continue to increase as a result of the coronavirus pandemic.
As U.S. retail and food service businesses began to reopen in a limited fashion in May 2020, they experienced an increase in sales of approximately 17% from the previous month. Clothing and clothing accessories saw the largest jump in sales from April 2020 to May 2020 with an increase of 176.7%. Other trends observed in April continued into May, as consumers continued shopping online and engaging in home improvement projects.
Some retailers have quickly adapted to survive, whether that is to engage in e-commerce, offer delivery/pick up in-store options, or creating a new way of generating revenue. Tech-savvy retail chains, such as Nike and Lululemon have created online workout apps in order to keep customers engaged and maintain demand for their products. Other retailers such as Bed Bath & Beyond have converted some retail locations to fulfillment centers due to an 85% increase in sales in its e-commerce platform.
With economic uncertainty at unprecedented levels, the retail industry is left with many more questions than answers. What will the economy look like in 6 months? Will consumers return to their old ways, or embrace new habits acquired during the pandemic? The retailers that can adapt most quickly to the changing environment will have the greatest chance for survival.
 Coresight Research. “U.S. Retailers Teeter on the Brink.”
 U.S. Census Bureau. “Advance Monthly Sales for Retail and Food Services– April 2020″ (amounts are seasonally adjusted)
 IBISWorld – Retail’s Reopening, May 28, 2020