With COVID-19 cases on the rise across the U.S., the path toward recovery across the retail landscape could be in flux.
Cases in New York City, a major tourist and fashion destination, have tripled in the last month, the city has said. The news comes shortly after the U.S opened its borders to international travelers that show proof of full vaccination, a move lauded by many as a way to revive tourist-heavy retail centers and flagship stores in New York City, Los Angeles, Las Vegas, Chicago, and Miami.
To many, recovery seemed to have arrived. In November, retail sales grew 0.2% from October 2021 and 16.1% from November 2020, following months of strong sales in October, September and August. The National Retail Federation predicted that sales through Dec. 31 could grow as much as 11.5% year over year, which would set new holiday spending records.
According to Thursday data from the Real Estate Board of New York (REBNY), all signs thus far have pointed to positive retail growth in New York City. And while foot traffic and sales have not yet reached pre-pandemic levels, the demand for retail space in Manhattan is on the rise, with more tenants agreeing to longer term leases.
Watch on FN
But a sudden uptick could reverse recent positive trends. According to REBNY, the progress made in Manhattan’s retail markets depends on “clear guidance” from leadership and the “ability to handle the increase in the COVID-19 cases.”
“The failure to contain COVID-19 or address these other issues would jeopardize the progress already made, in what has turned out to be a marathon rather than a sprint to recovery,” the report stated.
Earlier this week, New York State Governor Kathy Hochul announced new safety guidelines, which requires mask to be worn in all indoor public places unless that place has its own vaccine requirement. This requirement, which lasts until January 15, affects retail stores as well as restaurants.
Outside of New York, major companies such as Lyft, Uber, Apple, and Ford have all announced delays to their return to office plans as a result of the nationwide surge. And as Christmas approaches, holiday parties and gatherings are also being cancelled.
Store closures, which were common throughout 2020, have not been a major theme this surge just yet. Apple is the only store to announce closures in Ontario, Maryland, and Florida to grapple with the rise in COVID-19 cases.
Despite the surge, there is hope for the future.
Throughout the pandemic, retailers across the board have learned how to adapt their businesses to keep business going in the pandemic. For example, companies like Caleres and Shoe Carnival even managed to hit all-time quarterly records in sales, despite the pandemic’s accompanying influence.
The key, in many cases, is the ability to adapt and carry out an omnichannel strategy.
According to a recent report from foot traffic analyzer Placer.ai, the pandemic has proven that “brick-and-mortar retail may actually be stronger than ever before,” despite naysayers who say the future is entirely digital.
Retailers will need to adopt an omnichannel strategy moving forward to be able to handle any sudden changes in the retail environment, such as store closures or new mandates.
“Rather than framing online and physical sales as battling in a zero-sum contest, the two channels need to be leveraged together to provide a better overall experience for the customer,” the Placer.ai report said.
