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Category: General

Retail News Asia is committed to providing both local and global retailers with the latest General Retail news throughout the Asian market. This on a daily base.

  • Hong Kong retail sales plunge 44 per cent in February

    Hong Kong retail sales plunge 44 per cent in February

    February saw a catastrophic collapse in Hong Kong retail sales, which slumped a massive 44 percent year on year, the greatest fall since records were first taken. The unprecedented collapse followed a 21.5-per-cent decline in January and a 19.4-per-cent fall in December. For the first two months of this year, Hong Kong retail sales felt by 31.8 percent.

    The collapse in sales followed the effective lockdown of Mainland China for the last week of January and all of February and came as Hong Kong tightened travel into the territory worldwide following the outbreak of the coronavirus pandemic.

    A government spokesman confirmed the fall mainly reflected the heavy blow to tourism- and consumption-related activities dealt by the pandemic, although a distortion from the timing of Lunar New Year also contributed.

    “The business environment of retail trade will remain extremely austere in the near term, as the Covid-19 pandemic has brought inbound tourism to a standstill and severely dented local consumption demand,” the spokesman said.

    Figures released today by the Census and Statistics Department (C&SD) provisionally estimated the value of Hong Kong retail sales in February, at $22.7 billion (US$2.9 billion).

    After netting out the effect of inflation, total retail sales fell by 46.7 percent, following a 23.1-per-cent fall in January. For the first two months of the year, the inflation-adjusted decline was 33.9 percent.

    While sales of jewelry and luxury goods fell by 58.6 percent in January and February combined, it was a surprising 9.3-per-cent slump in the sale of food, alcohol and tobacco which caused the most significant impact on the overall figures, according to the C&SD.

    Sales of miscellaneous consumer goods fell by 21.9 percent; of electrical goods and other consumer durables by 25.1 percent; and of medicines and cosmetics by 42.7 percent.

    Department-store sales slumped 41.4 percent, apparel sales by 49.9 percent; footwear and accessories by 43.1 percent; furniture and fixtures by 19.6 percent; Chinese drugs and herbs by 23.7 percent; books, newspapers, stationery and gifts by 35 percent; and optical shop turnover slumped 28.6 percent.

    The only two categories showing growth were supermarkets, which boosted sales by 11.1 percent, during the first two months of the year, and fuels, up by 6.5 percent.

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  • Dark Sky announces acquisition by Apple and discontinuation of Android support

    Dark Sky announces acquisition by Apple and discontinuation of Android support

    Popular weather app Dark Sky made a huge announcement, and the forecast for Android users doesn’t look good. The company revealed that it has been acquired by Apple, causing some major changes for users in the near future.

    Dark Sky, which describes itself as a hyperlocal weather app, made its name on down-to-the-minute precipitation forecasts based on a number of sources, including crowdsourced data from users who opt-in. Receiving widespread acclaim, the app quickly amassed over 1 million Android users, establishing itself as a formidable force in the weather service market.

    Following the acquisition by the iPhone maker, announced in a company blog post, Dark Sky reportedly won’t go through any major branding changes (no iDark Sky for now), but support for Android will be discontinued on July 1, 2020.

    A complete drop of support for a large portion of users is kind of a big deal, especially for Android users like me, but the company also announced that all active subscribers will be given a refund at the date of discontinuation, which will also affect Wear OS and web clients of the service.

    Given Dark Sky’s reputation as the best weather app around, it’s sad to see it go as far as the Play Store is concerned. But based on the app’s #1 status in the Weather category of the iOS App Store, Dark Sky will likely still enjoy much popularity on the other side of the fence.

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  • Tesla To Supply FDA-Approved Ventilators Free Of Cost In U.S.

    Tesla To Supply FDA-Approved Ventilators Free Of Cost In U.S.

    American electric carmaker Tesla’s CEO Elon Musk has said that the company has extra FDA-approved ventilators that can be shipped free of cost to hospitals within the company’s delivery region. Announcing the news on his social media handle, Musk confirmed that the device and shipping cost will be free, but his only requirement is that the ventilators should be immediately used for patients who need it, not stored in a warehouse. Those who need it can contact Musk of Tesla on their respective Twitter pages or other official channels.

    Tesla did not immediately respond to a request for comment on how many ventilators it has to offer, or how the company will prioritize requests. However, while answering a Twitter user’s question regarding where did the company get the ventilators from, Musk confirmed that Tesla bought 1255 FDA-approved ResMed, Philips & Medtronic ventilators from China, and got it shipped to Los Angeles.

    Yup, China had an oversupply, so we bought 1255 FDA-approved ResMed, Philips & Medtronic ventilators on Friday night & air-shipped them to LA. If you want a free ventilator installed, please let us know!

    Governments across the globe have appealed to automakers and aerospace companies to help procure or make ventilators and other medical equipment amid a fast-spreading coronavirus outbreak, which has infected more than 777,000 people globally and killed over 37,500. In the United States, states hard hit by the pandemic have pleaded with the Trump administration and manufacturers to speed up the production of ventilators to cope with a surge in patients.

    Earlier this week, Ford Motor Co said it will produce 50,000 ventilators over the next 100 days at a plant in Michigan in cooperation with General Electric’s healthcare unit, and can then build 30,000 per month as needed to treat patients afflicted with the coronavirus.

  • Two more AirAsia carriers suspend operations from April

    Two more AirAsia carriers suspend operations from April

    Indonesia AirAsia and Thai AirAsia are the latest among the AirAsia Group carriers to suspend operations, leaving just AirAsia Japan in service.

    Indonesia AirAsia will suspend domestic flights until 21 April and international flights until 17 May. Thai AirAsia will halt all domestic services during the month of April, having suspended international flights since 22 March. Indonesia AirAsia’s grounding will not have a significant impact on Indonesia, as Lion Air dominates the market.

    The grounding of Thai AirAsia will have a more significant impact on Thailand, as the airline accounts for 19% of Thailand’s total capacity in February.

    Thai AirAsia’s parent Asia Aviation says the airline is implementing cost reduction measures. This includes voluntary pay cuts for management and senior employees, halting non-essential employee travel, and imposing a hiring freeze.

    Asia Aviation expects a reduction in Thai AirAsia’s variable expenses, which makes up around 70% of its total cost. General administrative expenses could also be reduced through a work-from-home scheme for employees.

    To cope with the suspension, the company is building up its liquidity levels. At the end of 2019, its cash on hand and current investments were collectively valued at Bt3.98 billion ($122 million).

    It says: ”Thai AirAsia also has unutilized revolving credit facilities with banks and has the ability to mobilize the liquidity further by way of the credit facility backed by the remaining no-encumbrance owned aircraft and/or other approaches in the future.”

    It discloses that a transaction announced in January, for the sale-and-leaseback of nine aircraft and the outright sale of one, has been completed in March, with net proceeds totaling Bt3.6 billion.

    Moving forward, Thai AirAsia will not take delivery of any aircraft this year and will study the number of aircraft it needs. The parent company adds that any significant capital expenditures will either be suspended or delayed.

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  • Panic buying underpins Japanese retail sales growth

    Panic buying underpins Japanese retail sales growth

    Japanese retail sales have recorded a distinct uptick as consumers enter a panic-buying mode in response to the coronavirus outbreak, according to Nikkei Asian Review. According to the Ministry of Economy, Trade and Industry, Japanese retail sales rose 1.7 percent year on year in February.

    Pharmacy sales showed the highest rate of growth, surging 18.9 percent due to higher sales of protective masks and toilet paper, among other hygiene-related purchases.

    Supermarket sales increased 6 percent following increased purchases of consumer goods.

    By contrast, sales figures for department stores slipped 11.8 percent resulting directly from a drop in tourism.

    The slowing down of local business has concurrently seen a drop in employment figures, with fewer businesses seeking to fill positions.

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  • AirAsia Indonesia suspends all flights starting April 1

    AirAsia Indonesia suspends all flights starting April 1

    Amid the alarming spread of COVID-19 across the country, low-cost carrier AirAsia Indonesia announced on Saturday that it would suspend all its QZ flight code services starting April 1.

    The carrier’s domestic and international routes will be temporarily suspended until April 21 and May 17, respectively.

    “AirAsia Indonesia will continue to monitor the development of the situation and conduct steps to anticipate what’s required to continue our flight services,” read the statement.

    The airline said affected passengers would be notified by email and SMS. Passengers can access support.airasia.com to either reschedule their flight before Oct. 31 at no additional charge, or convert the amount paid for the flight into a credit account that can be used for the next 365 days.

    Those who booked their flights through booking group services, travel agencies or other third parties are advised to contact the respective parties.

    Passengers who need to travel in the near future are advised to reschedule their flight to a date prior to April 1.

    Meanwhile, on March 20 national flag carrier Garuda Indonesia announced that it would continue to operate some of its services, including to Australia and Netherlands.

  • AS Watson sales grew 7 per cent last year, despite protests

    AS Watson sales grew 7 per cent last year, despite protests

    Health-and-beauty retailer AS Watson recorded 7 percent growth last year despite the political unrest in its key Hong Kong market.

    “What’s worth mentioning is the growth of health and beauty in Asia which was significantly impacted by the social unrest in the second half of 2019,” said AS Watson Group MD Dominic Lai. “If you take it out, the rest of Asia [outside Hong Kong] was growing at 14 percent, which is very healthy,” he said in comments translated by the South China Morning Post.

    Watsons Hong Kong represented just 2.6 percent of the retail division’s pre-tax profit last year.

    The retailer operates more than 15,000 stores in 25 international markets, predominantly in the health-and-beauty category. The sector benefited from developments in digital retail, house brands and exclusive offerings, and an uptick in customer connectivity with its 137 million-strong membership base.

    The firm expects its China trading this year to be affected by the coronavirus pandemic but is confident that its profits will be sustainable profitability given its geographical diversity, strong partner relationships and loyal member base.

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  • Indonesian retail bussineses starts shutting down as coronavirus crisis gets worse

    Indonesian retail bussineses starts shutting down as coronavirus crisis gets worse

    The Indonesian retail sector has begun to shut down in the wake of the coronavirus crisis, with shopping centers and retail chains voluntarily closing the doors to non-essential categories.

    More than 30 shopping malls have been shut down in the country despite no order from authorities. Lippo Malls Indonesia Retail Trust (LMIRT) has temporarily closed 11 out of 23 shopping malls in the Greater Jakarta region, Bandung and Bali.

    According to LMIRT, the company will close its malls until April 9 and waive rent for all affected tenants. Essential services including supermarkets and pharmacies remain open during the shutdown.

    Other shopping malls across Jakarta closed include Senayan City, Plaza Indonesia, Aeon Malls, Mall of Indonesia and Lotte Shopping Avenue.

    Meanwhile, McDonald’s Indonesia will cease dine-in services across the country for two weeks starting from April 1. The company said on its social media channels that it still offers to take away, drive-through and home delivery services.

    As Indonesian retail continues to wind down, many local restaurants have also closed their doors but continue to operate through third-party apps like Gojek and Grab.

    Japanese fashion brand Uniqlo is among the latest retailers to temporarily close their stores in Indonesia.

    As of today, Indonesia has confirmed 1414 positive cases of Covid-19 including 122 deaths and 75 recovered.

  • Zoom for iOS stops sharing information with Facebook after a new update

    Zoom for iOS stops sharing information with Facebook after a new update

    Last week, we reported that the popular video-conferencing app Zoom had a concerning privacy issue, when Vice’s Motherboard informed us that the app was sharing data with Facebook, even for people who didn’t have a Facebook account.

    Now, Motherboard brings to our attention that Zoom has removed the code from its iOS app that was sending data to Facebook and is now offering the new version of the code with an update. The app used Facebook’s software development kits (SDKs) on its backend and therefore it sent analytics data, mainly related to targeted ads, to Facebook, without notifying the app’s users in its privacy policy.

    However, Zoom’s CEO, Eric S. Yuan, apologized in a blog post about the concern raised by the situation. He stated that Zoom users’ privacy is extremely important to the company and that they have decided to remove Facebook’s SDK from the iOS app. Additionally, he said that the information, sent to Facebook, did not include names, notes, attendees or any meeting-related information, but data about devices’ OS and some technical specifications.

    He also provided the following list of example information that the SDK was sending to Facebook:

    • Application Bundle Identifier
    • Application Instance ID
    • Application Version
    • Device Carrier
    • iOS Advertiser ID
    • iOS Device CPU Cores
    • iOS Device Disk Space Available
    • iOS Device Disk Space Remaining
    • iOS Device Display Dimensions
    • iOS Device Model
    • iOS Language
    • iOS Timezone
    • iOS Version
    • IP Address

    The update is now available for download for Zoom for iOS from Apple’s App Store. With the new version, users will be able to log in using their Facebook account only through a browser, and not directly from the app. Previously, the in-app Facebook login was associated with the now removed Facebook SDKs.

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  • Thai AirAsia X Schedules Airbus A330 Charter Flights To Croatia

    Thai AirAsia X Schedules Airbus A330 Charter Flights To Croatia

    Bangkok-based long-haul airline Thai AirAsia X has scheduled four charter flights between Bangkok and the Croatian capital Zagreb in May and October. However, seeing that AirAsia recently announced it is suspending almost all flight operations, will these actually go ahead?

    AirAsia is temporarily parking almost all of its fleet as a consequence of severe travel restrictions imposed by countries across the world to which AirAsia affiliate airlines operate.

    Earlier this month, the airline had an incredible promotion called the Big Sale with deals on flights scheduled until 1st of July 2021. Tickets were being sold with either very heavy discounts, or completely free. Passengers only had to pay the tax charge, which on some flights amounted to as little as $2.83.

    Flights from Kuala Lumpur to Seoul in Korea, and to Australia’s Gold Coast, Perth, Melbourne, Sydney, and Taipei in Taiwan, were priced at just $16 during the sale. However, even though these reductions were incredible, they clearly were not enough to stimulate sufficient demand for air travel. Thus, AirAsia is now parking much of its fleet.

    Unlike AirAsia, Thai AirAsia X has actually suspended all flights, not just international ones. The suspension started on the 16th of March and will last for three months. It is therefore unclear whether the scheduled charter flights from Bangkok to Zagreb will even take place.

    Five rotations have been scheduled for the planned Thai AirAsia X charter services from Bangkok to Zagreb.

    The dates are the 1st of May, the 6th of May, the 11th of May, the 13th of October and the 19th of October. Clearly, the scheduling is done to cater for tourist demand outside of the peak holiday season. An Airbus A330 will be operating the flights on all dates.

    Thai AirAsia X is relying on evidence of existing demand to support these charter services. Presently, passengers wishing to reach Zagreb from Bangkok have a variety of connecting options of reasonable affordability.

    For example, for a seven-day journey departing Saturday 3 October and returning Saturday 10 October, options include:

    • Emirates ($750): a 14-hour journey with a stop in Dubai of under two hours
    • Turkish Airlines ($750): a 14-hour overnight journey with a stop of under two hours in Istanbul Airport for (though this might be a very short stopover given the difficulties Istanbul’s new airport is facing)
    • Turkish Airlines ($680): a 15.5-hour daytime journey with a stop in Istanbul of under three hours
    • Qatar Airways ($700): a 15-hour journey with a 1.5 hour stop in Doha
    • Austrian Airlines ($675): a 13-hour journey with a one-hour stop in Vienna
    • Eva Air and Croatia Airlines ($2,000): a 13.5-hour journey with a 1.5-hour stop in Vienna
    • Air France ($785): a 17-hour journey with a three-hour stop in Paris
    • Lufthansa and Croatia Airlines ($785): a 17.5-hour journey with a four-hour stop in Frankfurt

    For a relatively small market, and given that Zagreb Airport is not highly attractive to airlines, this is a highly satisfactory range of services. Stopovers as short as one hour are on offer, and competition from carriers of various alliances keeps prices reasonably low.

    Thai AirAsia X will be entering an already crowded market.

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  • Metro Retail Stores show strong profit growth

    Metro Retail Stores show strong profit growth

    Metro Retail Stores Group in the Philippines has reported a 21.5-per-cent growth in income to US$20.80 million (Php1.06 billion) last year.

    The growth was driven mainly by an 11.3-per-cent increase in sales to $722.31 million (Php36.8 billion) with operating expenses rising by a lesser rate of 9.3 per cent.

    Additional insurance recoveries relating to a serious fire the previous year saw non-core income increase by $4.29 million (Php218.7 million), offset by the net impact of the new PFRS 16 accounting standard of $7.13 million (Php363.7 million).

    Metro Retail Stores’ operating income, as well as net income, would have increased by 13.7 percent and 18.0 percent respectively excluding the impact of PFRS16.

    The firm says that increasing its store network to serve emerging cities and municipalities in Visayas, Central Luzon and the Bicol region was vital to the home-grown retailer’s strong performance.

    In 2018, the company recorded a 1.2-per-cent drop in net income due to the closure of a hypermarket and the temporary suspension of a supermarket following a fire, along with other factors.

    Metro Retail Stores Group is owned by the Gaisano family based in Mandaue City, Cebu. It has 53 department stores and hypermarkets in the Visayas Region.

    The company’s supermarkets, hypermarkets and pharmacies are all continuing to trade to provide much-needed basic goods and services as the Philippines struggles with the Covid-19 outbreak.

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  • AirAsia Group hibernates fleet

    AirAsia Group hibernates fleet

    AirAsia Group announced, at the weekend, it is temporarily hibernating most of its fleet across its entire network in Asia, in view of the COVID-19 pandemic that led to extensive border restrictions.

    The actual fleet downtime differs with each of the group’s member airlines.

    AirAsia Malaysia suspended all flights, international and domestic, 28 March and that continues to 21 April.

    AirAsia Philippines suspended all flights 20 March, and that continues to 14 April

    AirAsia Thailand suspended all international flights from 25 March to 25 April and now suspends all domestic services from 1 to 30 April.

    AirAsia Indonesia suspends all domestic flights 1 to 25 April and international flights from 1 April to 17 May.

    AirAsia India suspended all flights 25 March for 21 days. (The airline flies only domestic routes)

    AirAsia X Malaysia suspended most flights from 28 March until 31 May. The airline only services international routes.

    AirAsia X Thailand suspended all flights 16 March for three months. Its DMK-ICN service suspended until 19 April.

    Issued on behalf of the entire AirAsia Group and the AirAsia X Group the statement said: “With governments imposing travel and movement restrictions including home quarantine orders, AirAsia is also playing its part in helping curb the spread of the virus in order to keep flying safely for everyone.”

    The group added that it was prepared to reinstate services as soon as the situation improves and subject to the necessary regulatory approvals.

    Passengers have the option of converting flight bookings into a credit account that is valid for future redemption for 365 days or moving their flights for an unlimited number of times without any charges to another date prior to 31 October 2020.

    The changes to bookings are made via AirAsia virtual Allstar AVA on airasia.com or support.airasia.com. However, passengers mainly through social media posts that virtual chatbot AVA could not keep up with the influx of requests with no back-up system manned by people to relieve the pressure.

    The group added that the “temporary fleet hibernation is the right thing to do to ensure the well-being of our passengers and employees.”

    Both management and senior employees of AirAsia Group have volunteered a salary sacrifice, ranging from 100% at the very top to 15%.

    “This will help ensure that we can ride out this prolonged period of extremely low travel demand and at the same time minimise the impact on our employees, especially those in junior positions,” AirAsia Group Berhad explained in the statement.

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  • Singapore Airlines gets $13bn lifeline as airlines beg for help

    Singapore Airlines gets $13bn lifeline as airlines beg for help

    Singapore’s state investor Temasek Holdings and others will inject as much as 19 billion Singapore dollars ($13.27bn) into Singapore Airlines (SIA) in the world’s single-biggest rescue of an airline slammed by the coronavirus pandemic.

    The enormous financing plan, which drove SIA shares down as much as 10.5 percent on Friday, underscores the depth of financial trouble for the global airline industry, with nearly one-third of the world’s aircraft already grounded because of the pandemic, according to data provider Cirium.

    Many governments worldwide have already stepped in to help airlines amid the virus-induced travel slump, with the United States offering $58bn in aid. Many carriers have grounded fleets and ordered thousands of workers on unpaid leave to keep afloat.

    The 5.3 billion Singapore dollars ($3.72bn) in equity and up to 9.7 billion Singapore dollars ($6.8bn) in convertible notes – bonds that can be converted into equity stakes in the company – of the Singapore Airlines fundraising are being underwritten by Temasek, which owns about 55 percent of the group.

    The carrier has also obtained a 4 billion Singapore dollar ($2.8bn) bridge loan facility with the country’s biggest lender, DBS Group Holdings Ltd, to support near-term liquidity requirements.

    “This is an exceptional time for the SIA Group,” SIA Chairman Peter Seah said in a statement late on Thursday.

    SIA’s shares went into a rare trading halt earlier Thursday after plunging to their lowest in 22 years this week as investors feared the virus will have a deep impact on the company.

    “Under the current dire circumstances, the rights issue is the best tactical move for SIA. It underscores the carrier’s strategic importance to Singapore and the island state’s position as both a financial centre and aviation hub,” Shukor Yusof, head of aviation consultancy Endau Analytics, said in a blog post.

    SIA has said it would cut capacity by 96 percent, ground almost its entire fleet and impose cost cuts affecting about 10,000 staff amid what it called the “greatest challenge” it had ever faced.

    The rights issue will be offered at 3 Singapore dollars ($2.10) per share, a 53.8 percent discount to SIA’s last traded price of 6.5 Singapore dollars ($4.56).

    “While the raising looks earnings and valuation decretive, SIA now looks well-positioned to ride out the storm with balance sheet concerns largely de-risked,” Bank of America analysts told clients.

    Temasek International Chief Executive Dilhan Pillay Sandrasegara said the deal would not only tide SIA through its short-term liquidity challenge but would position it for growth beyond the pandemic.

    SIA said it would use the funding from the rights issues to beef up its capital and operational expenditure needs.

    On Thursday, the Singapore government announced more than $30bn in new measures to help businesses and households brace against the pandemic.

    Airlines around the world are seeking government aid to stay afloat after the coronavirus pandemic wiped out travel demand.

    Airport traffic at 12 key hubs in Asia-Pacific region plunged by 80 percent on average in the second week of March compared with the same period last year, Airports Council International Asia-Pacific said on Friday as it called for government relief measures for airport operators.

    United States airlines are preparing to tap the government for up to $25bn in grants to cover payroll, even after the government warned it may take stakes in exchange for bailout funds, people familiar with the matter said.

    American Airlines Group Inc, a much larger carrier, on Thursday evening disclosed it would be eligible for $12bn of US government aid as part of a $58bn loan and grant package for the airline industry.

    Australia’s Qantas Airways this week secured 1.05 billion Australian dollars ($636.1m) against its aircraft fleet.

    Others, including Air New Zealand Ltd and Virgin Australia Holdings Ltd, have warned they expect to be smaller carriers in the future.

    South Korean low-cost carrier Eastar Jet has begun returning some of its Boeing 737 planes to lessors, while Southwest Airlines Co said it would consider actions to reduce the company’s size if passenger traffic remains significantly lower six months from now.

  • South Korean department stores look to VIPs as sales slide

    South Korean department stores look to VIPs as sales slide

    South Korean department stores have launched an all-out effort to secure VIP customers who spend more than ordinary customers.

    Department stores have suffered fallout from the surge in popularity of online shopping malls for years, but sales have come under further pressure with the coronavirus outbreak.

    Sales at Lotte Department Store from March 1 to 22 decreased by 37.8 percent compared to the same period last year.

    At the height of the pandemic, and under the burden of its economic consequences, the top priority for South Korean department stores is to secure VIP customers.

    While VIP customers at the Galleria Department Store account for only 10 percent of all customers, their consumption amounts to 60 percent of sales.

    According to Shinsegae Department Store, the number of VIP visits last month was 2.5 times that of regular customers.

    Even when the number of visits by regular customers dropped by half after the Covid-19 outbreak, the number of VIP customers dropped by only about 20 percent.

    Managing loyal VIP customers and securing more big players in the future is a matter directly related to a store’s survival.

    This is why Lotte Department Store made changes to its VIP system. Under the old scheme, customers had to spend 20 million won (US$16,400) per year to qualify for the lowest level VIP program, as part of what was a four-level system.

    However, Lotte recently added another lower-level program to expand the scope of its VIP offerings.

    Meanwhile, Galleria Department Store, unveiled the largest VIP lounge in South Korea on the 12th floor of its newly opened Gwanggyo branch in Suwon, south of Seoul.

    VIP lounges in South Korean department stores have typically been places for customers who spend tens of millions of won a year. However, at the Gwanggyo branch, customers who spend 5 million won per year can enjoy the VIP lounge.

    “The fact that VIP thresholds have been lowered is indicative of a sales strategy to secure loyal customers by providing better services to more customers,” said a source in the department store industry.

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  • Why exemplary ethics will pay off beyond the coronavirus outbreak

    Why exemplary ethics will pay off beyond the coronavirus outbreak

    In the midst of the coronavirus (Covid-19) outbreak, retailers that have made bold commitments to their staff, customers and the wider community will be remembered while those that have proven themselves to be less ethical risk falling out of favor with shoppers when normality returns.

    In the UK, grocers were some of the first retailers to make changes to their operations due to the Covid-19 pandemic, for instance working to address the lack of product availability of key items due to stockpiling by introducing limits on the number of items shoppers could purchase, and shopping hours dedicated to the vulnerable, elderly and National Health Service workers.

    Those that have gone beyond this will be remembered more by shoppers, with Morrisons emerging as a retailer willing to take additional steps to protect its staff and suppliers – for instance by setting up a hardship fund for staff in financial difficulty, launching a call center for those who are unable to shop online, and paying small suppliers immediately to help them survive this crisis.

    As demand for fashion drops, international brands are harnessing their production capacity to produce equipment to help fight Covid-19. Inditex announced that it will produce surgical masks and hospital gowns for Spanish healthcare facilities, and LVMH has switched from manufacturing perfume to hand sanitizer for French hospitals.

    This highlights the retailers that are more willing to incur costs to benefit society as few major fashion brands are manufacturing such items so far, though many have the capacity to do so. Retailers need to make sure that press-friendly responses in the midst of plummeting sales do not backfire by ensuring the health of workers involved in the manufacturing of these items as the outbreak grows globally.

    Conversely, there are retailers that will be remembered for profiteering and treating their staff poorly, impacting consumers’ purchasing habits beyond the outbreak, especially if friends or family have been affected. The prime suspects of such behavior in the UK are, unsurprisingly, Arcadia and Sports Direct.

    Arcadia announced it was closing all of its stores hours before the government announced its job-retention plan, ending its fixed-term employment contracts early. Sports Direct initially said its stores would remain open following the announcement of lockdown in the UK, but quickly made a U-turn and closed all stores, leaving it unclear as to whether staff will be paid during the closure, and significantly inflating the prices of sports equipment that can be used to stay fit at home.

    Additionally, online behemoth Amazon has reportedly had cases of Covid-19 in 10 of its warehouses globally. As a retailer that has struggled with poor consumer perceptions of its ethics, this crisis provides Amazon the chance to improve this, as it could leverage its global logistics network to distribute medical supplies or get essential goods to vulnerable people.”

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