As the novel coronavirus spreads across the US, states are enforcing social distancing— leaving restaurants, bars and retailers to face an unprecedented time.
The governors of New Jersey, New York, Connecticut and many other states have taken precautionary steps by closing casinos, movie theaters, gyms and limiting restaurants and bars to takeout and delivery options only. Consumer behavior shifts, low inventory, supply chain issues and store closings are impacting retailers across all industries.
How Can Retailers Cope and Recover from COVID-19?
While retailers must put the safety and well-being of their employees and customers above all else, below are some items to consider admist the challenge of social distancing:
- Ensure sure your business is in compliance with the latest policies within in your county and state. It is crucial to remain up-to-date on restrictions to ultimately flatten the curve and be able to resume normal business as soon as possible.
- Businesses should continue to post on their website and social media to keep customers informed of your ability to provide services. Post lunch specials available for takeout or delivery or online sales or promotions. This can help generate more sales during this trying time.
- Continue to regularly communicate with your employees to keep morale up, let them know you are considering all options to continue operations and explain what steps you are taking to do so. This situation as serious as it is, will pass, and you will need your workforce to rejoin you, so what you do to assist them will ensure you can get back to normal operations as soon as possible.
If you have stopped payroll, you should help communicate alternatives to employees and provide this information to them:
- Reach out to your local bank contact and ask what information you can share with your employees on short term loans and other services they are aware of.
- Provide information to employees on how to go about taking 401k loans and their limitations and requirements so they are informed of their options under your plan.
- If you are able to assist employees, create policies, structure them appropriately and communicate your ability to assist them.
It is time for all of us to be socially responsible, and as business owners, you need to keep informed on local assistance communications as well as your local and Federal government communications to help your business and your employees the best ways possible.
Supply Chain Operations
As we are seeing in grocery stores, Target, Wal-Mart and the like, keeping up with supply is a challenge during COVID-19. Consumers have now shifted their behavior buying with health in mind. Hand sanitizers, disinfectant wipes, paper goods, masks and various grocery items have quickly been purchased by consumers so that they may comply with social distancing, working from home and care for their families.
Customers are purchasing mass quantities of goods, leaving retailers struggling to keep up. To sustain the demand, many grocers and retailers are limiting the quantity of health-related items a customer can purchase.
Retailers need to also work with their suppliers to replenish items promptly. It is time to focus on critical goods such as produce, health care items, packaged goods etc. Make sure to monitor stock inventory daily and increase stock for high demand items. If possible, try to see if your supplier will deliver directly to your store rather than a distribution center as many centers now have become understaffed, causing delays.
contact a member of Withum’s Consumer Products Group.
Conserving Cash Flow
With many businesses forced to close their doors for an undetermined amount of time, profits will suffer greatly. Businesses need to take proactive steps to save cash where they can:
- Postpone all non-essential spending. Cut all travel, entertainment, event spending, etc. that are not needed for current business operations.
- Speak with your vendors to possibly extend payment terms.
- Check-in with your bank about increasing lines of credit to use as a safety net.
- Review your insurance policies for business interruption coverage. Check out Withum’s Forensics & Valuation Services Team’s article to learn more information regarding these claims.
- Consider small business loans and keep informed on government programs. Keeping current on government initiatives and resources will be important also for communicating with employees to assist them where possible.
Planning for the Future
Uncertainty behind the virus still lies ahead. Realistically, normal business operations will not happen immediately. It will take time and preparation. Use this time to review market data, supply chain logistics, buying strategies and business operations with your leadership team to create a plan for the next major impact or recession.
Please utilize Withum’s COVID-19 resource center for tips on how your business can cope and recover from this pandemic. Reach out to our Retail Group for more information on how Withum can help your business during this difficult time.
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