Even before the fallout from COVID-19, when the economy was humming, many retailers were grappling with changing shopper preferences and habits as well as with cutthroat competition. The COVID-19 crisis has only magnified the pressure, with headlines suggesting a “survival of the fittest” environment. From department stores and malls to iconic retailers and small local stores, the industry must brace for major upheaval in the coming months. Cases in point: J Crew and Neiman Marcus, the first major retailers to file for bankruptcy protection, Nordstrom closing 16 stores, and Victoria’s Secret calling off its deal to sell a majority stake and take the brand private.
And even when stores start to reopen, the pandemic will have left an indelible footprint on how consumer-facing businesses operate. As recently as February, when the virus was just spreading beyond China, U.S. consumers continued to be upbeat. However, in March and April, The Conference Board U.S. Consumer Confidence Index declined sharply, as did U.S. retail sales, experiencing a record plunge of -8.7% in March from the previous month with a further decline expected for April. The widespread global health issue quickly became an economic one, as its proliferation ended up dealing a triple blow to retailers.