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Wednesday, 15 July 2020

COVID Simply Accelerated Retail Death Spiral

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COVID Simply Accelerated Retail Death Spiral

“The fact is that COVID has already accelerated everything that was taking place in the marketplace,” says the former co-CEO of Whole Foods, Walter Robb. “Some people say that between 30 and 50 percent of small businesses are going to go out of business. We are going to see disruptions as the COVID turns left or turns right. It’s throwing curveballs at businesses. It’s very difficult to operate in this environment.

Walter Robb, former co-CEO of Whole Foods, discusses how COVID related business closures and restrictions by urban governors and mayors has accelerated the existing trend of retailers closing due to competition with big rivals that have a sophisticated and expansive presence online such as Amazon and Walmart:

COVID Accelerates Retail Closures

The fact is that COVID has already accelerated everything that was taking place in the marketplace. So I think you will see some more (retail bankruptcies). I saw some numbers from the Yelp folks that suggested there would be 150,000 businesses fold. Some people say that between 30 and 50 percent of small businesses are going to go out. We are going to see disruptions as the COVID turns left or turns right. It’s throwing curveballs at businesses. It’s very difficult to operate in this environment.

The main thing is can we keep the economy open in some safe manner? It isn’t whether it’s an essential business or a non-essential business. It’s whether we can keep it open for both the team members and for the customers. It’s going to really determine some of that. Some folks have already thrown in the towel and some folks are going through bankruptcy.

But there are a lot of folks working hard in retail to serve people. It will depend on whether we going to get some sort of support, both in terms of the main street lending facility amendment or in terms of keeping the economy open to let them continue to serve their customers.