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Pandemic just one of many retail challenges

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With the holiday selling season nearing an end, retailers are preparing to close the books on a calendar year characterized by major disruptions caused by COVID-19. Thanks to skillful executive leadership and the heroic efforts of frontline personnel, the nation’s food, drug and discount stores can look with satisfaction at a time when they fulfilled their role as businesses that meet essential needs of consumers. They can’t, however, afford to let their guard down.

The new year promises to bring tough challenges that will test their mettle. Despite substantial progress in containing the pandemic, COVID is still a potent and unpredictable adversary, possessing the power to cripple supply chains, sideline workers and alter consumer behavior. The Delta variant of the virus remains widespread — more than 100,000 COVID cases are confirmed in the U.S. every day — and Omicron looks to be even more transmissible, if less virulent.

If continued uncertainty about the course of the pandemic weren’t enough, executives must now contend with the effects of inflation. Stemming in large part from the turmoil unleashed by COVID, inflation is rising at an annual rate of 6.8%, a level not seen in this country for almost four decades.

Maintaining adequate staffing is another problem that emerged as restrictions imposed during the height of the pandemic were relaxed or eliminated. Many people forced out of the labor market by COVID have been slow to return, making it difficult for retailers to fill positions ranging from cashiers and other store associates to warehouse workers and truck drivers.

In response, a number of companies have increased their minimum wage and the benefits they offer, resulting in higher operating costs. Even with the added compensation, finding the right people for the right jobs is sometimes a struggle.

Then there’s the state of flux in the retail market itself. The measured development of omnichannel capabilities under way prior to the start of the pandemic accelerated exponentially during the past 19 months. Conditioned by the speed and efficiency in filling orders exhibited by Amazon and other pure-play e-commerce companies, today’s consumers expect all retailers to deliver products and services whenever, wherever and however they choose. Putting the necessary assets in place while continuing to operate an extensive network of brick-and-mortar stores is no easy task.

Even a brief look at the road ahead shows that retailers will likely need to exhibit as much talent, ingenuity and fortitude next year as they have in 2021.


ECRM_06-01-22


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