Apple closing stores, will others follow?

Coronavirus empty shelves

Apple (NASDAQ: AAPL) announced
today that it is closing all its retail stores outside China in response to the
COVID-19 (coronavirus) pandemic. The company has about 500 stores globally and
had previously shut its China stores during the outbreak in that country. Those
stores reopened today.

The question now is, will other retailers follow suit and
start closing locations?

“As of today, all of our stores in Greater China have
reopened. I also want to thank our operations team and partners for their
remarkable efforts to restore our supply chain. What we’ve learned together has
helped us all develop the best practices that are assisting enormously in our
global response,” Apple CEO Tim Cook said in
a statement
. “One of those lessons is that the most effective way to minimize
risk of the virus’s transmission is to reduce density and maximize social
distance. As rates of new infections continue to grow in other places, we’re
taking additional steps to protect our team members and customers.”

Apple stores will remain closed until March 27. Its ecommerce
operation will continue to operate, and all employees that can work remotely are
being asked to do so. The company is also providing pay for all hourly workers
as is operations were not disrupted, the statement said.

The National Retail Federation
(NRF) sent out guidance on Friday urging governments to “refrain from blanket
recommendations or mandates to close retail business across all sectors as ‘non-essential.’”

While retail sales have boomed for some retailers, especially
grocery, large big-box retailers, and wholesale clubs, others have seen a drop in
foot traffic. The National Retail Federation (NRF) said it has been in contact
with the federal government and is ready to assist as needed.

“We know the effects of this virus are impacting millions of
people, directly and indirectly, in the U.S. and around the world,” Matthew
Shay, president and CEO of NRF said in a statement. “Retail brands are always
on the frontline with citizens in communities large and small, and they are
partnering with the health care industry and government officials to ensure
COVID-19 is contained and mitigated as quickly as possible. Retailers are
grateful for the opportunity to play such an important role and look forward to
continued collaboration on the municipal, state and federal levels.”

Consumers have been buying out essentials at stores nationwide
as panic buying takes hold. That has led to issues restocking shelves either
due to lack of product, or lack of trucking capacity to move the product.

The second part of the issue is being addressed by the Federal Motor Carrier Safety Administration (FMCSA). On Friday night, FMCSA issued a 50-state waiver for hours-of-service compliance for commercial drivers transporting goods related to COVID-19. Those goods include:

Equipment and supplies related to the emergency restocking
of stores

Supplies and equipment, including masks, gloves, hand
sanitizer, soap and disinfectants, necessary for healthcare worker, patient and
community safety, sanitation, and prevention of COVID-19 spread in communities

Persons designated as “necessary for the establishment and
management of temporary housing and quarantine facilities; those “designated by
federal, state or local authorities for transport for medical, isolation or
quarantine purposes”; and “personnel to provide medical or other emergency

As to whether more businesses will follow Apple’s lead, NRF
said it is up to retail business owners to determine the best course of action
for their businesses.

“NRF believes that retail business owners are in the best
position to determine whether their individual stores should remain open or
close. Retailers also intend to fully comply with government instructions,” the
guidance said. “However, clarity and certainty is needed so that businesses may
plan appropriately and consumers remain confident in their availability to
access groceries, home and auto supplies, pet services, farm and agriculture
equipment and livestock feed, and basic home health needs for children, adults
and pets.”

NRF added that it would encourage local governments to
provide as much advance notice as possible.

“Advance notice and specific details are necessary to avoid
causing disruption from consumers overwhelming stores and exhausting available
supplies quickly. It will also enable retailers to prepare their supply chains
to handle customer needs both before and after mandatory store closing orders
from the government,” it said.

Many states are limiting size of gatherings to 250 or fewer
people. Movie theater chain AMC Theatres said it would not close its theatres,
but it would limit
to half the size of the theater’s capacity. To date, no major retailers
have issued similar proclamations, but local businesses and restaurants in some
communities are limiting the number of people in their businesses.

When President Donald Trump announced a national emergency
on Friday, he did so alongside
the CEOs of major retailers
Walmart (NYSE: WMT),
Target (NYSE: TGT),
Walgreens (NASDAQ:
) and CVS Health (NYSE: CVS) among

“These are extraordinary times that call for extraordinary
measures,” Richard Ashworth, Walgreens president, said. “Collaboration with
health officials, the government, and across our industry and other sectors is
critical at this time. Walgreens has a long history of being there when our
customers and communities needs us most.”

On Saturday, Trump said the government is considering some
domestic travel restrictions, but it is unclear what impact, or any, that would
have on the movement of goods.

Earlier this week, Walmart said it was working to replenish
store supplies as quickly as possible, including diverting deliveries to areas
in more immediate need.

“It should come as a surprise to no one that the U.S.
government has reached out to the retail industry for assistance in this time
of crisis. Our retail leaders stand at the ready to react and respond to help
ensure the security and safety of employees and consumers alike in the
communities they serve,” Shay said.