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Coresight Research’s Coronavirus Blog features insights from our global research analysts on the impact of the outbreak on retailers and consumers in the US, Europe and Asia, and provides free research and data on the coronavirus crisis. Check back regularly for updates.
You can also view our Coronavirus Insight reports, which provide deeper coverage on the retail impact, and our Coronavirus Tracker, which brings together key data including timelines, event cancellations and temporary store closures.
News: Department stores Macy’s and Kohl’s and specialty retailers Ascena and Gap have all announced employee furloughs due to coronavirus-driven store closures. While e-commerce represents between 24.4% and 31% of these retailers’ revenues, online revenues alone will not sustain operations of these multi-billion dollar retail operations. The table below shows select major retailers that announced furloughs on March 30, 2020.
Coresight Research Insight: In our Coronavirus Retail Robustness Index, we evaluate the retailers best able to weather the coronavirus pandemic. Based on this information, we predict today’s announcements are only the beginning of many more to some in retail. We further predict a new estimate of permanent store closures of 15,000 in the year 2020, up from our previous estimate of 8,000. Even market leaders are struggling as foot traffic disappears, and many are exercising all options including drawing lines of credit, cancelling orders, cutting spending—and even taking corporate pay cuts. For some mega-retailers such as Macy’s, the magnitude of the physical footprint and cost of the physical space (not to mention the lost revenue) means furloughs and store closures are inevitable. The only question is: How many store closures and employee furloughs will become permanent if the situation continues?
In the space of just a week, US shoppers have become much more worried about the coronavirus outbreak: Our latest US consumer survey, undertaken on March 25, recorded a significant week-over-week uptick in the proportion of respondents that are extremely concerned about the pandemic. We also found that a much greater proportion of US consumers are reducing their purchases of discretionary categories than just one week earlier. The cutbacks in spending are reflective of shoppers battening down the hatches for the long haul: Over half of respondents in our March 25 survey thought the severe impact of the outbreak on everyday life in the US will last for three months or more.
Shopper cutbacks also mirror the shutdown of a huge tranche of US brick-and-mortar retail. As of Friday, March 27, we recorded almost 62,000 temporary store closures by major US retailers. Coresight Research estimates that discretionary retailers make up around three-quarters of brick-and-mortar stores, and the effects of a universal shutdown are likely to be profound and lasting—as we noted in our recent 2020 US Store Closures Outlook, we anticipate that some of the retailers that recently announced temporary store closures, including some well-known names, will never reopen their doors.
Find our rolling list of the major retailers that are closing stores in our Coronavirus Tracker—which we update every working day.
Coresight Research recently introduced the Retail Robustness Index, a tool for evaluating how retailers are positioned to weather the current, unique retail environment caused by the coronavirus outbreak.
The Retail Robustness Index evaluates five main criteria:
Our Index calculates a Robustness Score based on a weighted average of these five factors and can be used to understand the factors that position retailers better to navigate the current retail environment.
With nearly all of India on shutdown due to the coronavirus outbreak, businesses in the country are responding by implementing innovative ways of working with customers and the larger community. Here are 10 of the innovative approaches we have seen from companies in the Indian market:
As the impacts of the coronavirus outbreak emerge and crystalize at a rapid pace, the Coresight Research team is changing how we cover this crisis. With this post, we launch our blog on the coronavirus crisis—allowing our analysts to offer their insights and analysis on the outbreak more immediately and in a bite-size format.
Our inaugural post runs down our 15 “must dos” for retailers in the US and other Western markets—and these include learnings from our coverage of the China market and how we saw retailers there responded to the coronavirus shutdown. Here are our 15 things that US retailers must do now:
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