How Will Covid-19 Impact the Retail Sector
Like most of you, we closely followed the news on the spread of the coronavirus in the United States over the past couple of weeks. Directly linked to this pandemic, the stock market is plunging.
We wanted to know how Covid-19 will impact the retail sector of the market.
So, we did a little research and here is what we have discovered so far.
We recently visited with a client and he shared with us that he had recently been in Fry’s Electronics. He was shocked at the lack of inventory on the shelves. He said he finally asked an employee if they were closing. The employee said no, they weren’t closing. They just can’t get inventory out of China. No inventory….no sales.
What the experts are saying.
In an article on Retail Dive, Doug Stephens, author of “Reengineering Retail” said “Covid-19 will be like adding jet fuel to an already exploding segment of retail. Amazon and a handful of others will be the beneficiaries of a windfall”.
Also discussed in the Retail Dive article China’s buyers account for 40% of the 407 billion spent on luxury goods. If we look at the impact of Covid-19 on the luxury retail market alone, that equates to $162.8 billion in lost revenue. According to Forbes magazine, China owns a 31.3% share of world apparel exports by value and provides many of the raw materials needed in the global supply chain. To quote the Forbes article “what hit me the most during my research was the far-reaching, epic nature of how this virus is impacting the global economy, with retail at the epicenter.”
The “new” view of retail
As of this writing, REI has closed 162 stores nationwide. The stores will remain shuttered for a least two weeks. WFAA reported a list of thirteen stores that have closed in Northpark Mall. The stores will remain closed until the end of the month along with many other businesses in the Dallas area. Verizon, T-Mobile, and Apple have all closed.
Bottom line? We believe it will be months before we truly know how Covid-19 will impact the retail sector. What we already know is that stores are losing revenue at break-neck speed. Employees are losing wages, small businesses are suffering. However, we have faith in the American spirit and strength. We want to assure you that we will be keeping an eye on the market, the economy and your property values.
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