Stores see shopping surge, but can they meet the demand?
Gov. John Carney’s decision to relax COVID capacity restrictions changes the equation for many stores and businesses looking to get back to normal after over a year of modified operations.
But contributor Eileen Dallabrida reports while many retailers are already seeing a welcomed rebound in business, it’s not all smooth sailing.
At Christiana Mall, hours have just been expanded to 10 a.m.-8 p.m., Monday through Saturday. Workers are outfitting a new Levi’s store, one of several retailers poised to open in the regional shopping powerhouse. Signs mandating 6 feet of social distancing are about to go down as Delaware eases restrictions on capacity at stores and restaurants, effective May 21.
More than a year after the COVID-19 pandemic first sent retail into a tailspin, shoppers are returning to stores, pushing sales up 9.8% in March. Steve Chambliss, general manager at the mall, says the retail surge started when consumers started receiving $1,400 stimulus checks from the government.
“It put money back in the economy and a lot of money went to the mall,” he says.
Sales of sporting goods, including athletic footwear, lead the charge, bouncing 23.5%. Consumers, many of whom had been stuck at home for 13 months, replaced yoga pants and sweatsuits with dress slacks and snappy shirts, pushing clothing sales up 18.3%.
"It put money back in the economy and a lot of money went to the mall."
There’s a pent-up demand for apparel as people return to their offices. Kids are not wearing their pajamas to school anymore,” Chambliss says.
One of the most prosperous malls in America, Christiana boasted a 100% occupancy rate before the pandemic. A number of storefronts have gone dark at the mall and other shopping centers as a result of retail bankruptcies and consolidation.
Chambliss says the mall already is on the rebound as more shoppers are vaccinated and consumer confidence returns. The center is adding seats in the food court, where there are two new eateries, Popeye’s Chicken and Poke It Up, a sushi concept. Christiana expects to announce several new leases in coming months.
“By the fourth quarter, we will be mostly full again,” he says.
Consumers are expected to keep their foot on the spending pedal in coming months, with retail watchers predicting a stellar back-to-school season. Sales of big-ticket items also are on the uptick. In April, Ford reported that sales of trucks and SUVs accelerated 70%, fueled by the latest round of government checks. Electric vehicle sales tripled.
“The consumer is nearly always the key driver in the economy, and with the consumer in good financial health, a sharp demand is expected to unfold over the coming months,” says Jack Kleinhenz, chief economist the at National Retail Federation.
The NRF predicts the economy will grow 6.6% this year. That’s the biggest boost since a 7.2% leap was recorded in 1984. Further, shoppers who have retained their jobs are flush with cash. In February, Americans socked away $2.4 trillion in savings, twice as much as before the pandemic.
Denise D. Nordheimer, a lawyer who practices in Wilmington, is looking forward to updating her professional wardrobe, as well as buying clothes for social occasions. For fun, she recently bought a pair of vintage Frye boots, which she will wear with a long, hippie-inspired skirt. She will shop for petite skirts and jackets at Banana Republic and shoes at Nordstrom and Macy’s. She thinks of dressing up as an antidote to the gloom of 2020.
“There’s so much healing that needs to be done regarding the past year and I love wearing beautiful things,” she says.
Despite shopper enthusiasm, there are continued challenges on the retail front, including shortages of inventory, building supplies, and workers to mind the store. Prices are up on such staples as disposable diapers, laundry detergent, peanut butter and breakfast cereal and are expected to rise again this summer.
Soaring lumber prices are expected to persist until at least November, due to a backlog in orders created when mills cut back production early in the pandemic in anticipation of massive slowdowns. Instead, demand boomed as consumers improved their homes, pushing prices from a low of $200 for 1,000 board feet of lumber to the current price of $1,000.
In Rehoboth Beach, Tanger Outlets hosted job fairs on April 30 and May 1 at each of its three centers, where prospective sales associates could meet with store managers and learn about employee benefits and discounts.
“Tanger Outlets is eager to connect people who are looking for fun and engaging employment with over 115 stores,” said Amy Schnerr, general manager, who said the outlets are gearing up for an active summer season.
At 7-Eleven, franchisees are pushing back against the corporation, saying a dire labor shortage is hampering stores’ ability to comply with a chain-wide mandate to resume operating 24/7 by May 24. Since March 2020, most stores have been closed from midnight to 5 a.m. for cleaning and sanitation.
Here are other trends to watch on the retail front:
- Amazon.com and Walmart are taking doorstep delivery a step further, bringing purchases inside consumers’ homes. Delivery staff will enter garages using smart technology and will be tracked via wearable cameras. Walmart will allow only staff to conduct in-home deliveries rather than third-party providers. Customers who sign up for the service will meet their driver before their first order is delivered.
- Hiccups in the supply chain are creating shortages of pet food. In particular, Fido and Fluffy will likely be getting less wet food due to a shortage of aluminum cans. Delays in international shipments and slower inspections due to the pandemic are compounding the problem, says Dana Brooks, CEO of the Pet Food Institute, a Washington D.C.-based trade group. Brooks also notes that people working from home have been indulging their pets with lots of treats, contributing to the shortage.
- Consumers who spent more time outdoors during the pandemic are likely to keep it up. Sales of equipment for paddle sports are up 53%, according to NPD; sales of camping equipment have risen 31%.
- UBS predicts brick-and-mortar retail will continue to erode as 9% of U.S. retailers—that’s 80,000 stores—will be shuttered by 2026 as online purchases climb to 26% of retail sales. In 2020, 12,200 stores closed, including such big-name merchants as Lord & Taylor, Pier One and Stein Mart.
- Many of their customers are still in dress-down mode, but sales associates are stepping up and dressing up. A Harvard Business Review study says casually dressed employees are viewed as inexperienced, while better-dressed sales associates are perceived as having more expertise and providing better service.
While the pandemic fueled a spike in online shopping, many consumers are expected to return to brick-and-mortar stores where they can try on sweaters, sniff perfume, and ask a knowledgeable salesclerk what tool they need to fix a faucet.
A Mastercard study gauged what kind of merchandise consumers are likely to stick with buying online and which goods they will resume buying at brick-and-mortar stores. They found that while online sales of hardware popped 34% during the pandemic, all but 3% of those customers are heading back to stores. Online drug stores are expected to hang onto 8% of their 24% bump. Online apparel sales are shrinking the fastest, as more than 90% of consumers will head to stores to replenish their wardrobes.
Back at Christiana Mall, shoppers are carrying purchases to their cars or calling ahead for curbside pickup. Restaurant patios are opening, waiting for an influx of diners as pandemic restrictions ease.
“Things are not back to the way they were but they are certainly moving in the right direction, where it’s a social event to shop with the people you care about,” Chambliss says. “We’re seeing more people and more categories of shoppers, from local people to the tourists, who come to us because we have no sales tax. Shoppers are feeling good.”