The Coronavirus' Effect on the Retail Industry

The Coronavirus pandemic had a massive effect on the retail industry, both negative and positive. Ecommerce, along with physical stores in certain categories, such as supermarkets, pharmacies and home improvement stores, saw sales soar dramatically. Many other brick and mortar stores, especially department stores and clothing retailers were devastated, at least temporarily.

As people changed the way they lived and worked, retailers had to adapt at an emergency-induced pace. Ecommerce, already on the rise before the pandemic, reached levels never seen before.

Online grocery shopping, which soared during the pandemic, continues to thrive. In the second quarter of 2022, the penetration rate for U.S. grocery online orders reached 2.8%, about triple the rate during the same quarter in 2019 according to UBS. Online ordering with curbside pickup has soared at supermarkets as well. By 2022, retailing was in much better shape, with many consumers eager to return to in-person shopping.

Post-COVID, a significant wave of consumers returned to in-store shopping, particularly during the holiday season, enjoying the chance for social interaction as well as being able to see and touch merchandise before purchase. While consumers were hit hard by spiraling price inflation, many were, nonetheless, anxious to get back to their lifelong habits of browsing and buying in stores. While this boosted physical stores, it significantly slowed what had recently been robust growth in ecommerce.

On the plus side, once stay at home orders were lifted, many shoppers returned to stores in surprising numbers. Within many physical stores, contactless payments soared in popularity, due to consumers’ greater interest in hygiene and physical distancing. Self-checkout is much more prominent that it was just a few years ago. Price Chopper, for example, is making smartphone apps widely available, on which customers can scan and tally items themselves. Giant Eagle offers an app similar to Amazon Go that enables customers to pay for items directly from their phones without going through a checkout line. Walmart is revisiting similar technology called Scan & Go.

Internet Research Tip:

The National Retail Federation (www.nrf.com) offers a wealth of information regarding the U.S. retail industry.

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