Between 20,000 and 25,000 retail stores may close this year, twice the number as last year, as the coronavirus pandemic continues to have an impact on consumer behavior.
That was the message delivered by John Harmon, senior analyst of Coresight Research. Harmon was a presenter on a webinar hosted by Planalytics on Wednesday afternoon.
Harmon said he’s expecting there will be a U-shaped recovery as retailers navigate government-dictated staged reopenings across the country, but business is not expected to immediately return to post-pandemic levels. Although Coresight is predicting a “return to relative stability,” he said, many retailers are preparing for a holiday season that will find consumer demand to be down 20 percent from 2019.
In the last five weeks, he said, two-thirds of consumers were buying more online than they had previously. But what they were purchasing was mainly food and sanitation products, home office supplies and fitness equipment, Harmon said, or a “high prevalence of products for survival,” such as gloves and bread-making machines. Apparel was not tops on the list.
At the same time, he predicted that post-lockdown, consumer demand will be changed dramatically. More than 48 percent of consumers say the first thing they’ll do is meet with friends, 37 percent will get a haircut, 28 percent will go to a restaurant, and only 18.6 percent will buy apparel, footwear or accessories. And when they do go back to a fashion store, they’ll need to accept the “new normal,” of wearing masks, gloves, social distancing and having their temperature checked before shopping.
While businesses don’t have much control over the pandemic, the one thing they can understand and work with is the weather.
Evan Gold, executive vice president of global partnerships for Planalytics, predicted shoppers “will be more attuned to weather than ever before” and will want to shop for seasonal merchandise in season, rather than before.
So retailers need to make sure they have the right product in their stores at the right time, Gold said.
He said Memorial Day weekend will see a “warmer trend” for most of the country and June will be cooler on the coasts, warmer in the middle of the country and wetter in the West.
“As consumers venture out, it’s imperative that you have product on your racks to meet their demand,” he said.