We are starting to be able to anticipate the impact that the coronavirus (or COVID-19) will have on retailers. For some retailers, they’ve been given a big payday. Sorbent and Kleenex – we’re looking at you! However for others it’s getting pretty close to doomsday. There are ways that you (from the social isolation safety of your lounge) can help retailers recover though.
Who has been hit hard?
Food court retailers in shopping centres have said that their sales are down approximately 40-50%. For many hospitality businesses, this is their profit margin so the affect could be devastating. It has also been reported by the Shopping Centre News that retailers in Chinatown, Sydney are trading down by up to 90%. There are multiple factors causing such a decline including stereotyping, social isolation tactics and the absence of Chinese tourists. With the restaurants in Chinatown trading at a cataclysmic low, it’s contributed to the flow on effect to the Sydney fish markets. Fishmongers have described their gross sales numbers as being down by 70%.
The impact of the coronavirus isn’t limited to traditional retailers. Melbourne International Comedy Festival 2020 has been cancelled, costing comedians like Rhys Nicholson $66,000.00.
Travel retailer Flight Centre announced that it will close 100 stores across the country. This is being categorised as an immediate response to global travel restrictions and overall travel deterrence. That being said, Flight Centre is a multimillion dollar group of companies that should be able to survive the coronavirus pandemic.
The real impact is felt by the employees. Flight Centre employees will be reallocated to different stores, however these employees have their salary largely made up from commission. They have built their lives, and made financial commitments, around a median income that, naturally, has factored in commission. With the tourism industry being battered by the coronavirus, employees will see a significant salary decrease. This could fundamentally impact their ability to meet basic financial obligations – such as mortgages and rent.
According to Philip Lowe the governor of the Reserve Bank, we should expect to see the GDP fall by half a percentage for the March quarter as a result of coronavirus. In the March quarter, we will also see some of the economic impact from the Australian Bushfires – which could be around an additional 0.2%. For the June quarter, we’d except to see a more significant drop in the GDP.
Who is singing ‘dolla dolla bills y’all?’
On cool side of the pillow (aka, the flip side) retailers within the health industry are experiencing an extraordinary increase in sales. The sale of face masks have reportedly increased by over 590%. The sale of hand sanitizer has increased by 420%. Vitamin sales have even increased by a whooping 78%. Note: Vitamin C is great for your skin and preventing scurvy – it’s not going to cure coronavirus/COVID-19 though. Perhaps somewhat ironically, one can no longer buy pasta either (except Risoni pasta – which has brutally been left on the shelf #PastaHierarchy).
Of course the two supermarket giants Woolworths and Coles are going to see a significant elevation in gross sales, but we expect that this will somewhat correct itself once the pandemic is extinguished. Our bodies can only eat so many frozen pizzas and right now, those panic buyers have an apocalypse level stored in their freezers. They won’t be going back for more in the near future.
How can you support your local retailers?
Most retailers participate in omni-channel retailing, so you can support your retailers AND practice social distancing (yay!). Seriously though, we do encourage you to check out your retailers e-commerce sites and support them through the power and prowess of the internet!
If you’re favourite retailer doesn’t have an e-commerce store, consider purchasing a gift certificate. This is a great option for our hospitality retailers as-well. The gift certificate option means much need income in retailers pockets now. And you still get to enjoy the meal/products once its safe to make a return to society (wipe the popcorn crumbs off yourself first!).
Depending on how the Australian infection numbers develop over time, some retailers may be forced to close down. Italy has closed all restaurants and stores, with the exception of pharmacies and supermarkets. New York and Los Angeles have followed in similar style, effectively putting the cities into lockdown. Some retailers may simply made the choice to close out of downright good citizenship in an effort to flatten the curve (i.e. limit the spread). We’d encourage you to speak to your members of Government to advocate for more financial support for these businesses. Our local small businesses simply won’t survive without it.
Finally, you can support these retailers by remembering them after the business interruption ceases. Buy an extra coffee from your local cafe. Visit a travel agent instead of using booking.com. Be mindful.
We encourage everybody to come together as community, and as mates (metaphorically – social distancing!). Practice social etiquette. This means being mindful of how your actions may impact vulnerable people, or vulnerable businesses, in our community. There is a fair difference between caution and chaos. Listen to the experts and adopt their reasonable advice – nothing more and nothing less.