What the Pandemic Will Mean for Retail

The COVID-19 pandemic is having a huge impact on the retail sector of the economy, as you can see just by walking down a street and looking at the closed and boarded up stores, or seeing the empty mall parking lots. It's acting as a magnifier of trends that were happening before the pandemic, as this excellent article from The Atlantic points out.

The year 2020 may bring the death of the department store, marking the end of that 200-year-old retail innovation after decades of decline. Macy’s has furloughed more than 100,000 workers. Neiman Marcus has filed for Chapter 11. More legacy department stores and apparel retailers will almost certainly follow them to bankruptcy court or the corporate graveyard. As these anchor stores shutter, hundreds of malls that were already wobbling in 2019 will be knocked out in 2020.

The pandemic will also likely accelerate the big-business takeover of the economy. In the early innings of this crisis, the most resilient companies include blue-chip retailers like Amazon, Walmart, Dollar General, Costco, and Home Depot, all of whose stock prices are at or near record highs. Meanwhile, most small retailers—like hair salons, cafés, flower shops, and gyms—have less than one month’s cash on hand. One survey of several thousand small businesses, including hotels, theaters, and bars, found that just 30 percent of them expect to survive a lockdown that lasts four months.

I'm most concerned about the effect on small businesses. Driving through Cliffside (a neighbourhood in the Toronto suburb of Scarborough), I was saddened to see what was becoming a lively community completely closed up. I wonder how many of those businesses will be there in six months or a year?