The retailers have not finished suffering

Les détaillants n’ont pas fini de souffrir

Even if several retailers are out of breath, the retail trade has not finished suffering, according to industry experts. Other restructurings are expected, over the coming months, in particular when governments will close the taps of the financial support.

Since march, several large chains are protected from their creditors in order to improve their financial health. The majority of these signs had, however, already problems well in advance of the pandemic.

Aldo, Reitmans, SAIL and Sportium, DavidsTea, Frank And Oak, Lolë, Enterprises Vagabond, to name that they. And the situation is not much better south of the canadian border. Several big names are in trouble, such as JCPenney, New York & Co., Neiman Marcus and J. Crew.

According to the professor at the Faculty of administrative sciences of Laval University, Yan Cimon, the world of retail is ” very fragile “. A second wave of the COVID-19, this fall, could be fatal for many canadian retailers.

“This weakness will not go away. The current recovery is gradual, and it will still be a wait before the level of economic activity is like before the pandemic, ” says Mr. Cimon. “Consumers consume differently, today. There is the fragility, and the uncertainty, ” he continued.

The professor believes that even without a second wave, several channels could still close shops, soon, in order to improve their cash flow, and even shelter from their creditors.

Less products

Retailers will also like the challenge of negotiating with their suppliers. Some of these would already to minimize their risks by cutting off the orders and asking for more money for the deposit, when the shipment of the goods.

A situation that does not surprise Mr. Cimon or JoAnne Labrecque, a professor in the Department of marketing at HEC Montréal.

“There are companies at risk. The suppliers know their clients. It is the entire supply chain is affected. […] Because of the new health measures, the rate of production is also reduced, ” notes Ms. Labrecque.

This last is also of the opinion that the dark days are not ended in the world of retail. And that the financial losses of the last few months will not be recoverable.

This week, a report by Deloitte stated that the shopping centers will have to evolve to stay relevant in the post-COVID-19. It must be said that the attendance in the 10 most important sites in the Canada has declined from 22% in 2019 compared to 2018.

According to the audit firm, the retailers and owners of shopping centres will have to “rethink their strategy” to sell products safely and fast and to compete with Amazon. They will also need to rely more on digital tools.

The impact of the pandemic between march and July on the action of retailers

  • Metro : Of 52,93 to $ 58,93 $
  • Loblaws : Of 67,36 to $ 70,35 $
  • Canadian Tire : Of 133,86 to $ 121,58 $
  • Empire : 30.15 to $ 33,34 $
  • Loew’s : Of 111,04 US $ 144,39 US $
  • Dollarama : Of 39,64 to $ 49,60 $
  • Cascade : From 11,40 to $ 16,08 $
  • Couche-Tard : From $ 41.30 to 46,39 $
  • MTY Food Group : From 52,74 to $ 28,23 $
  • Lululemon : Of 228,90 US $ 316,82 US $

Changes in consumption habits

According to the report, Consumer Insights 2020 PwC Canada, retailers will soon have to adopt “creative solutions” to transform the customer experience so that more consumers could be more cautious in their spending in the post-COVID-19. “This suggests that they will turn to products or services that they consider to be of a higher value,” warns PwC.

The signs will also have to adjust to the new requirements of consumers, as the growing interest in “local products” and those ” socially responsible “. According to PwC, over the next few months, ” retailers should also pay attention to the consumer behavior of the generation Z “, in particular as regards the demand for online purchases. Several will have to improve their offers on the internet to satisfy their customers.

A few winners of the COVID-19

Hardware stores, some retailers of sports and supermarkets saw their sales skyrocket in the break of Quebec. Recently, the management of the brand, Canac, has revealed to the Journal that 2020 could be a record year in terms of sales.

In April, Metro claimed to have seen its revenues jump from$ 125 Million due to the pandemic, to reach 3.99 to$ Billion during its second fiscal quarter ended on march 14. Loblaw has indicated, for its part, that the pandemic had generated additional revenue of$ 751 Million for its first quarter of the year. All revenues were 11.8 G$. At Empire, head of the IGA, sales soared to$ 792 Million (+12.7 percent) between march and may to reach more than$ 7 billion.

The mask required and its impact

The obligation to wear the mask in enclosed public places, as early as today, could have impacts in the world of retail trade and catering. According to JoAnne Labrecque, a professor in the Department of marketing at HEC Montreal, these are the restaurants that will suffer the most.

“The wearing of the mask will mitigate the experience. There, we will go to a restaurant almost only to promote the establishment “, she says.

“Those who are against the wearing of the mask will not go may be more in the shops. There are also people who will feel more secure, ” she continued. Recently, several retailers, such as La Vie en Rose and Groupe Boucher Sports, came out publicly to denounce the fact that they will have to play the police with their customers. The companies are exposed to fines between $ 400 and $ 6000 can.

Never the same any more

The retail sector has been hit hard by the pandemic. The retailers, some of whom have been able to benefit more from the break of Quebec, will need to adapt to the new lifestyles of consumers.

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