What COVID-19 Might Mean For The Future Of Retail

Instead of gearing up for March Break shopping, mall staple stores Abercrombie and Fitch, Nike, Apple Store, Urban Outfitters, and Lush Cosmetics have all temporarily closed up shop in response to the COVID-19 (aka Coronavirus) pandemic.

Despite their bright and welcoming spring windows, their doors remained locked over the weekend, with letters informing would-be shoppers of their hiatus.

Lululemon and Aritzia announced yesterday they too would follow suit. Lululemon locations will remain closed until at least March 27, but will continue to pay employees for their hours during this time. Aritzia reps said stores would be closed until further notice, and that all online profits from sales during the shutdown will benefit the brand’s ‘Aritzia Community™ Relief Fund.’

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A letter to our Community: We know you’re being overwhelmed with news about COVID-19, and we know it’s a lot right now. Here, at Aritzia, you, our loyal clients are at the heart of what we do and why we do it. We’re committed to being both responsive and responsible, navigating these times with everyone’s safety in mind. We recognize that others are dealing with far more complex and impactful challenges than where we find ourselves. Our goal is to do our part for the global well-being. HEALTH AND SAFETY As of Monday, March 16, we’ll be closing our retail locations until further notice. Based on the information we have, we feel this is the best decision for our people, our clients, our partners, and our community as a whole. In addition, we’ll be shifting all Support Office employees to flexible working arrangements. It goes without saying, we’ll take every measure to keep our environments and our people safe. These are complicated times, things are changing quickly and we’re committed to keeping you informed. ARITZIA COMMUNITY™ RELIEF FUND Aritzia is committed to providing the financial continuity of both our internal team and the employees of our overseas partners impacted by COVID-19. ALL OF ARITZIA’S PROFITS while we get through this challenging time, will go to the Aritzia Community™ Relief Fund to support our people and their families. OUR COMMITMENT TO YOU Should you need some normalcy, aritzia.com will continue to be there for you. We’ve significantly increased precautionary measures to ensure the well-being of our Aritzia Concierge and Distribution Centres so that you, the women who love Aritzia, can continue to enjoy Everyday Luxury. Everything we’re doing is with input from people throughout the Aritzia team. As we navigate this complex and changing landscape, we’re being challenged on a daily basis. We’re doing our best to balance what’s right for our people, our clients, our partners, and our communities. Let’s continue to take care of each other. Your Aritzia.

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Malls like CF Eaton Centre, Sherway Gardens, and Square One have shortened their hours.

While pretty much everything on the pandemic front remains more fluid and changing (and confusing) than ever, it doesn’t seem farfetched to wonder whether malls could very well take a cue from the stores they house and temporarily close up shop all together very soon.

COVID-19 is clearly leaving few industries immune to potentially devastating impacts, but for retail, the virus comes at a sensitive and challenging time for the industry.

covid retail

We’re already at a time when we’re seeing once-beloved brands close the doors to their liquidated stores on the regular. While industry-dominating powerhouses like Aritzia and Lululemon will most likely be just fine, others may not be. Maybe they weren’t doing that great before the virus outbreak, frankly.

While it may seem like we’re in a middle of an apocalypse now, the aptly named ‘retail apocalypse’ has been a thing for a while, as retailers struggle to stay afloat in an era of increased competition and a surge in online shopping. Brands that rely on China – where COVID-19 originated – for production have particularly struggled as of late, as their product dwindles in stores due to Chinese virus-related restrictions in the manufacturing sector.

The supply chain for these retailers took a major hit long before the term “self-isolation” became a common one in the vocabulary of Canadians.

As Jim Danahy, CEO of retail consulting firm CustomerLAB told CBC last month, the supply chain impacts of COVID-19 will be felt harder than 2003’s SARS outbreak because Chinese manufacturing has quadrupled(!) since then. Yikes.

Everything from apparel brands and retailers of sports equipment, to big box North American retailers like Home Depot rely on China. In fact, Home Depot sources about 30 per cent of its products from the country. Of course, if Home Depot doesn’t have the supplies – and people don’t have the cash – in the wake of the outbreak, home renovations are going to be put on hold, an added blow for the home-improvement industry.

Naturally, COVID-19 has also affected food retail, with Chinese restaurants and fast food spots remaining virtually empty for weeks compared to their counterparts of different types of cuisine.

covid retail

Today, Tim Horton’s announced that it would close the seating area in its restaurants across the country, offering only take-out, drive-thru, and delivery. The move comes after Starbucks announced it would close some of its stores and remove the chairs from seating areas in others, in an attempt to discourage coffee-drinkers from sticking around.

Especially in the midst of Italy’s ongoing lockdown, the fashion world’s luxury market has also taken a major blow with the closure of the country’s fashion and textile industry.

Apparently, setbacks could total $1 billion. Not only is Milan home to headquarters to labels like Versace, Armani, and Prada, other high-end brands like Louis Vuitton and Stella McCartney rely on now-shuttered Italian factories for the manufacture of product. Making matters worse are the many cancellations of orders of Italian textiles and products from foreign buyers around the world. Let’s not forget about the cancellations of countless fashion shows in cities around the world as of late. In fact, luxury stocks were hit the hardest by the initial outbreak.

On the other end of the spectrum, local businesses – many of who already struggle thanks to sky-high commercial rent prices or property tax – could see a major blow as well.

At press time, there has not been an official shutdown of independent retailers and restaurants by the Province, a growing number of local businesses are closing down shop voluntarily – whether out of a sense of personal responsibility, or potential shaming of running business as usual (just ask Lance Bass how that went for him and his restaurant Rocco’s).

Perhaps the biggest threat to retail, however, isn’t the availability of product at all, but rather the lack of dollars from would-be shoppers – individuals whose bank accounts may have taken a hit from COVID-19 for one reason or another.

There are more than a few headlines that warn of an impending global recession. But for the meantime, as retail outlets begin to reopen in China (including Apple), we can only hope that “business as usual” resumes safely and successfully when the time is right. 

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