The World Health Organization made it official on Wednesday, declaring the coronavirus a global pandemic.
But the label, while sobering, did little to change the on-the-ground reality of life in the midst of COVID-19. Shopping is slowing, investor panic brought about a bear market in the U.S., Italy remains shut down, governments worldwide are scraping together aid packages and everyone’s standing just a little farther apart.
The Dow Jones Industrial Average dropped 1,464.94 points, or 5.9 percent, to 23,553.22, leaving the market down 20.3 percent since its all-time high on Feb. 12 — anything greater than 20 percent down from a recent high is considered a bear market.
Most other global markets posted smaller declines, including the Nikkei 225 in Tokyo, off 2.3 percent to 19,416.06, and the FTSE 100, 1.4 percent to 5,876.52 in London. (The British government laid out a 12 billion-pound aid package to counter disruptions caused by COVID-19).
Bucking the trend was Milan’s FTSE MIB, which rose 0.3 percent to 17,928.64, as the Italian government set aside a total of 25 billion euros to support the country as it fights Europe’s worst outbreak.
Among the biggest decliners in the market were Tailored Brands Inc., down 22.6 percent to $2.33; J.C. Penney Co. Inc., 12.1 percent to 50 cents; Gap Inc., 11.8 percent to $10.97; Nordstrom Inc., 11.4 percent to $24.03, and PVH Corp., 10.9 percent to $56.63.
The luxury sector, which depends on China for its growth and was hit hard early in the COVID-19 outbreak, fared better, along with the stronger European markets. Posting more modest declines were Moncler, down 2.6 percent to 29.36 euros; Kering, 2.5 percent to 438.50 euros; LVMH Moët Hennessy Louis Vuitton, 1.4 percent to 330.15 euros, and Hermès International, 0.2 percent to 594.60 euros.
The rolling crisis, which first shut down stores in China and gummed up supply chains, has now whipped around the world to U.S. consumers, particularly luxury shoppers.
Most people who get COVID-19 experience only mild symptoms, but the illness can be deadly to the elderly or to those with weak immune systems. So far there have been more than 124,000 confirmed cases and while over 66,000 of those people have recovered, 4,584 have died.
Tedros Adhanom Ghebreyesus, director-general of the World Health Organization, said the group has been working around the clock accessing the outbreak.
“We are deeply concerned both by the alarming levels of spread and severity, and by the alarming levels of inaction,” he said.
But signs of action are becoming more apparent.
New York Gov. Andrew Cuomo, for instance, called the National Guard to the center of the state’s outbreak in New Rochelle, N.Y., moved The State University of New York to a “distance-learning model for the rest of the semester” and guaranteed two full weeks of paid leave for all state workers who are quarantined.
But as businesses and government officials react and the public grows more aware and wary of the COVID-19 situation, stores have felt the impact.
Kimberly Greenberger, an analyst at Morgan Stanley, said foot traffic in U.S. specialty and department stores fell 9.1 percent last week, much steeper than the average 3.9 percent decline over the past five years.
The drop last week was made up of a 14.7 percent fall in luxury retail traffic and a 3.9 percent decline for apparel retail. And Greenberger said it was likely that most of the week’s decline came from the second half of the week as COVID-19 fears rose.
“We make room for the possibility we could see double-digit traffic declines beginning [this week] as U.S. cases continue to rise and a full week of increased U.S. coronavirus concerns are incorporated,” Greenberger said. “While we see room for e-commerce to pick up some lost brick-and-mortar sales, we do not expect it to be able to fully offset brick-and-mortar declines.”
An analysis by Customer Growth Partners said “consumer shopping patterns have been changing rapidly over recent weeks.”
The first change in the U.S. became apparent by Feb. 21, when shoppers started stocking up on hand disinfectant and face masks. By the end of February, it was bottled water and canned soup.
The analysis crunched shopping data from 27 major retailers between Feb. 15 and Monday, finding that comparable transactions fell by about 2.5 percent. Almost half of that has been redirected online, leaving a net drop of 1.3 percent.
Among the sectors seeing the sharpest declines in year-over-year transaction velocity were specialty retail, down 9.8 percent, and department stores, off 6.6 percent.
Most retailers have been vague so far about the in-store impact, which is just now becoming clearer.
Urban Outfitters Inc. sales and traffic have steeply declined in the last week in Milan, Seattle and “a few additional locations.”
“Due to the uncertainty around the spread of COVID-19 in North America and Europe, at this time, we cannot forecast the extent to which COVID-19 will impact our business in the first quarter,” said the company, which has four Urban Outfitters stores in Seattle and two in Milan.
Companies that sell basics for those stocking up are faring better.
Walmart said it is taking extra steps to “maintain a healthy environment.”
“Stores are cleaned daily, which includes using sanitizing solutions in high-touch, high-traffic areas,” the retailer said. “We have increased associate focus on cleaning and have dedicated an associate to maintain key areas throughout the day. We’ve seen increased foot traffic, so we’re sending additional cleaning supplies for use in places like the registers and on shopping carts.”
But it’s going to be a while before many shoppers feel like congregating in stores.