Trade groups outline path to retail recovery

Retail recovery

As some states and political leaders push to quickly reopen retail stores and restart the economy, members of two leading trade groups supporting large retailers are urging a phased approach. The Retail Industry Leaders Association (RILA) and the National Retail Federation (NRF) have issued a Blueprint for Shopping Safe proposal that recommends distribution centers reopen nationally to ensure a smooth supply chain. It also documents a three-phase rollout for retail operations, based on specific guidance and data on a state-by-state basis.

Whether their proposed measures are enough to salvage the troubled retail sector is uncertain. Earlier this month, Pamela Danziger, a senior contributor to Forbes, noted major retailers that had their credit ratings downgraded by Fitch or S&P. Many were facing financial concerns before the COVID-19 pandemic but now face months of lost revenue — as much as 90% in some cases. They include J.C. Penney, Dillard’s, Kohl’s, Levi Strauss, Macy’s, Nordstrom, Tapestry (Coach and Kate Spade brands), L Brands (Victoria’s Secret), and Gap.

As of April 3, 190,000 physical
retail locations had closed, accounting for more than 50% of U.S. retail square
footage, according to Neil Saunders of GlobalData Retail. Still, retail will be
back, and RILA and NRF are looking to ensure shoppers can return to stores and
do so safely.

“As conversations turn to the
reopening of the economy, retailers are uniquely situated to provide input,
because we’ve been on both sides of the stay-at-home orders,” Brian Dodge, RILA
president, said in a statement. “Groceries, pharmacies and other retailers that
have remained open have implemented practices and protocols that are keeping
employees and communities safe. The blueprint released today builds off those
successful operating practices. Our goal is for the safe reopening of retail,
and we want everyone, policymakers, employees and our customers to know that
the industry is ready to shop safe.”

One of the keys is the ability to
open up all distribution centers, which represents Phase 1 of the plan.

“A fully functioning supply chain
with all distribution centers operational is crucial for retailers to meet the
needs of customers. In addition to directing goods to store shelves,
distribution centers are vital to e-commerce and other contactless forms of
shopping,” the document reads.

Freight news

Freight Futures daily curve: 3/18

Trucking Freight Futures rally as the April National contract trades at $1.375/mile with more companies returning to the market to hedge their exposure to freight rate volatility.
Read More
Coronavirus empty shelves

Apple closing stores, will others follow?

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,…
Read More

The groups support keeping proper
safety protocols and social distancing procedures in place.

“Retailers [and restaurants] have
established and implemented safety protocols to allow contactless pickup and
in-home deliveries … . We believe these operations should be expanded to
include retailers immediately across all states and jurisdictions, provided
that retailers are following the established practices of social distancing,
hygiene, and sanitization guidelines,” it read.

Retailers could advance to Phase 2
once state health departments and other health experts determine it is safe to
do so. This phase entails the opening of additional stores “with robust health
and safety protocols in place.”

“Uniform, statewide standards
ensure the reopening of the economy is safe, efficient, and productive for
customers, employees, and enforcement agencies alike,” the document advised.

Among the safety protocols the
groups encourage for Phase 2 are social distancing, avoiding unnecessary
touching such as handshaking, protective face coverings for both employees and
customers as well as the uses of gloves for delivery or installation services,
consistent and regular cleaning and disinfecting of surfaces in delivery
operations, and limiting retail store occupancy based on square footage or
store capacities.

Phase 3 would be the lifting of all
restrictions, based on the proper installation of safety protocols including
maintaining supplies of sanitization equipment and encouraging safe sanitation

In conjunction with the Blueprint for Shopping Safe, NRF launched an online solution center as part of its Operation Open Doors. Based on input from its members, the efforts prioritize four “functional areas” for retail sectors: health and safety; people and personnel; logistics and supply chain; and litigation and liability.

Matthew Shay, president and CEO of
NRF, sent a corresponding letter to President Donald Trump.

“Planning for and safely reopening
retail and restaurant businesses — including returning teams and associates to
physical locations — and welcoming customers back to stores and dining
establishments is essential to a functioning and healthy economy,” Shay wrote,
noting that the retail sector employs 25% of the nation’s workforce and
comprises 70% of GDP in the U.S.

“As a community, retailers are
preparing for new processes, consumer behaviors and legal requirements or
restrictions, where there was once no playbook. Our country must not allow a
lack of resources, regulations that are not fit-for-purpose, and the fear of
litigation to delay efforts to return to work and live safely and sustainably,”
Shay wrote.

The online solution center includes
a 10-page Operation Open Doors checklist that details how operations can safely
return to business.