Delaware moves from Phase 1 to Phase 2 of its reopening plan this Monday. Phase 1 allowed many stores to open their doors again, albeit with limited capacity. Phase 2 allows even more things to open, and those already operating some additional capacity – up to 60 percent.
So, how are stores faring in this launch of a “new normal?”
We turn to contributor Eileen Dallabrida to get the lay of the land.
In any given June, the Tanger Outlets at Rehoboth Beach are bustling with shoppers. Parking lots are filled with cars. Buses drop off tour groups.
This June, as retailers begin to emerge from government-mandated shutdowns sparked by the COVID-19 pandemic, 64 of the outlet’s 119 stores are open. That’s up from 16 stores that were operating on June 1, the day the non-essential retail shutdown was lifted. Shoppers, wearing mandatory masks, are greeted with bottled water and hand sanitizer.
“It’s comfortable and enjoyable, not too crowded,” says Amy Schnerr, the general manager. “The stores are reopening as fast as they can and shoppers are in good spirits.”
Behind the scenes, merchants are trying to heal their ailing cash balances. That isn’t easy at a time when many retailers have too much inventory—or not enough. Some retailers suffered a second blow when protests against police brutality following the killing of an unarmed black man spiraled out of control into looting.
At Tanger Outlets, Schnerr says traffic is about 50 percent of what it was this time last year, as shoppers return to such attractions as Tory Burch, Nike, Talbots, Vera Bradley, and Ann Taylor. Applebee’s, I-Hop and Chipotle Grill also are open, and have applied for permission to add more outdoor seating to accommodate diners in keeping with social distancing restrictions.
Some stores are reporting healthy rebounds as shoppers stock up on summer apparel and other goods. American Eagle says the 556 stores that are now open are bringing in 95 percent of the revenue generated this time last year. Kohl’s says sales are steadily growing, from two-thirds of their pre-COVID level in late May to three-quarters in June.
Still, not everyone is heading back to shops. Russell Tuckerman of Wilmington recently bought two pairs of shorts. But he purchased them online from L.L. Bean and he doesn’t plan to buy much else.
“One of the things I’ve learned during the pandemic is there is very little I truly need,” he says. “We’ve been spending less and saving more.”
Analysts note that demand for business attire is down with offices closed and professionals working from home. Brooks Brothers, Jos A. Bank and Men’s Wearhouse have taken it on the chin as guys take off their ties and no one suits up for events like weddings and funerals.
Here are more trends on the retail front:
- Curbside pickup is in the driver’s seat, with orders leaping 208 during the pandemic. Customers say they appreciate the safety and convenience, with 59 percent saying they are likely to continue curbside pickup after it’s safe to shop freely. As for the merchants, they have established curbside pickup procedures and worked through the logistics, so it’s easy for them to maintain the practice.
- More robots and fewer people are fulfilling orders. Many retailers started automating their supply chains to limit human requirements for social distancing. Robots don’t get sick and they don’t make other people sick. Mega-merchants Amazon and Walmart are using robots to track and clean inventory. Smaller retailers are beginning to follow the trend.
- Touchless systems such as ordering through a kiosk and self-checkout also will grow, eliminating interaction with a human cashier.
- The pandemic is contributing to unhealthy spending habits, with 4 of 10 consumers saying they’ve made impulse purchases to deal with the stress of social isolation, according to a survey from Credit Karma.
- Dollar stores are growing even more popular as consumers who are suffering from job losses and reduced hours look for ways to stretch their dollars. In the first quarter, Dollar General sales grew 21.7 percent, more than double the rate of gains enjoyed by Walmart and Target.
Expect deep discounts from retailers such as American Eagle who are marking down apparel and accessories as much as 60 percent in order to get goods out the door. Johnny Janosik, which has been furnishing Delmarva homes since 1953, is offering speedy free delivery and discounts of up to 80 percent on furniture and mattresses.
In contrast, Gap is packing away a lot of inventory rather than get dinged on margins now, betting that staples such as jeans and T-shirts which won’t look out of fashion when they bring them out in stores next spring.
At Dover Mall, where looters broke into Forever 21 and Cricket Wireless on May 30, stores are reopening, including Macy’s. A handful of stores at Concord Mall in North Wilmington also are open.
About 60 percent of stores are operating at Christiana Mall, says Steve Chambliss, the general manager. True Religion and Wilsons Leather won’t reopen and the J.B. Dawson’s sit-down restaurant is exiting, opting not to renew its lease. The food court is open with social distancing measures in place and Brio and Cheesecake Factory are offering takeout orders.
“Some stores are still working through their financials to see whether they can reopen,” he says. “Chains may open in phases so they have cash flow.”
Each store has a sticker in the window stating how many people are allowed inside. Most merchants are going with a lower number than the 30 percent of fire code capacity permitted under Phase 1 of the state’s reopening.
“It’s more of a one-on-one experience for the customer,” Chambliss says. “People are glad to be shopping and the employees are glad to be back at work.”
Despite challenges, there are bright spots on the retail front. Macy’s, which had expected business to be about 20 percent of normal, far surpassed that number to 50 percent of pre-pandemic sales. Chambliss expects a burst of back-to-school shopping in late July, a season of spending that is traditionally second only to winter holiday sales.
Campbell Soup is also is enjoying better-than-expected numbers, with soup sales up 42 percent as consumers shelter in place. The company also produces Pepperidge Farm cookies, another popular comfort food, with sales up 28 percent.
On Market Street in Wilmington, protests of police brutality were marred by looting, further damaging businesses that were just emerging from lockdown. Al’s Sporting Goods, already challenged by the cancellation of school and league sports seasons, lost about 75 percent of its athletic shoes and clothing to looters. Police have examined store video to try to identify the culprits. La Fia Bistro pushed back its reopening to June 10 after looters smashed the front window and stole liquor from the bar.
To entice shoppers to return, retailers are sending email blasts to existing customers and using social media to reach out to new customers. Merchants also are implementing effective, old school strategies, such as big signs that say WE’RE OPEN!
Something Comfortable, a lingerie boutique in Rehoboth, sent an email blast urging patrons to toss their quarantine pajamas and come into the store to buy new sleepwear. The store also has resumed bra fittings and is welcoming out-of-state shoppers.
The email echoes the sentiments of merchants eager to resume business: “We are ready to welcome you back!”