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COVID-19 crisis puts retailers to the test

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For retail companies that sell essential merchandise and remain open during the COVID-19 pandemic, the crisis has created new exigencies that are testing their mettle. With consumer preferences and shopping patterns undergoing sudden and dramatic shifts, stores have had to scramble to meet unprecedented demand, while at the same time doing everything they can to protect the health of employees and customers.

Chain drug stores, discounters and supermarkets have proven resilient. In the wake of a round of panic buying after stay-at-home orders were issued, long-established supply chains held up, enabling mass market retailers to continue to do their job, even as their stores were called upon to meet customers’ basic needs for groceries, medicine and other essentials, and were left to pick up the slack for the 50% of food consumption that occurred away from home prior to the arrival of COVID-19.

Internet grocers have fared less well. Besieged by consumers eager to shop from the safety of their homes, particularly in hard-hit regions like greater New York, the companies have struggled to keep pace. Would-be customers have to wait weeks for a delivery slot; those that succeed in finally obtaining one often discover that many products are out of stock.

Recent experience highlights both the appeal and limitations of online retailers. For Amazon, which failed many loyal Amazon Fresh shoppers when they needed the company most, its image of invincibility could be tarnished; all internet merchants will have to rethink their capacity to serve consumers.

In addition to exposing shortcomings, COVID-19 has spurred innovation. The efforts of online grocers and brick-and-mortar retailers have been supplemented by a growing number of entrepreneurs who are opening pop-up stores. The trend is especially evident in the restaurant industry, where owners, often with the help of distributors like Sysco Corp., are converting unused dining rooms into neighborhood markets.

Once the coronavirus outbreak is over, it will be interesting to see how lasting an impact it leaves on shopping behavior. The online retail business will, despite its recent stumbles, probably gain some ground. But the betting here is that many consumers won’t forget the brick-and-mortar stores closer to home that served them well during the emergency.


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