Temporary retail store closures experienced earlier in the year have returned. They do not return alone, but with the return of lockdowns as well as COVID-19 cases increase in the U.S., increasing in some regions more than others. California issued limited stay-at-home orders until December 21, Texas ordered nonessential business to close, although challenged, temporary lockdowns in parts of New York State, indoor dinning is temporarily prohibited in Michigan, Washington, New Mexico, Illinois, and Oregon.
Considering food service and drinking place sales have not fully recovered from earlier this year with October estimates at a year-over-year 14.2% reduction, as lockdowns, temporary closures and restrictions mount, recovery of the subsector likely takes a step back.
Retail in general has seen 8,325+ retail store closures year-to-date as of November 20,2020. So, is retail poised to be disrupted as seen from March through summer? Not necessarily.
Consumers and retailers have adjusted in our new environment. Consumers have changed shopping patterns as they pivot more towards online shopping for which significantly increased e-commerce sales. Consumers have also accepted newer fulfillment and shopping options such as BOPIS (buy online, pick-up in store) and curbside pick-up. Simultaneously, retailers have adapted to the new environment as they strengthened their e-commerce and delivery capacities, made changes to their supply chains and embraced emerging tech.
While store closures, temporary or permanent would be of detriment to retail, it could be reasoned that recent store closures and lockdowns could be potentially less impactful than what was realized earlier this year as more retailers are now better conditioned to mitigate economic afflictions. Furthermore, consumers have embraced e-commerce and contact-free shopping. Retailers have also moved the holiday shopping season forward in this COVID-19 environment as retailers encourage consumers to shop earlier in an effort to avoid and minimize potential social-distancing matters as stores become more congested over the holiday season.
Luckily, for consumers, if in-store inventory is depleted, they have the option to shop online and a significant portion will.