PROVIDENCE, R.I. (WPRI) ─ Rhode Island retailers have been waiting to reopen since Gov. Gina Raimondo ordered them closed in mid-March, but a business professor at Providence College tells Eyewitness News that even if they’re allowed to reopen soon, they’ll most likely continue to struggle as the economy recovers.
On Monday, Raimondo unveiled her three-part plan to reopen the economy, which could begin as early as May 9, as long as everyone continues to practice social distancing.
In the first phase, retail stores will be allowed to offer in-store pickup of pre-orders, and with new restrictions, potentially allow a limited number of shoppers inside.
Professor Helen Caldwell said the financial impact of the pandemic is hitting all retailers, whether it’s a small local business or a big box chain.
“Nieman Marcus, which is a high-end retail store, is about to go into bankruptcy. JCPenney is about to go into bankruptcy,” she said. “If you lose those stores, what’s going to happen to the mall?”
The temporary closures will have a widespread impact on owners, employees and landlords once businesses are allowed to reopen, according to Caldwell. She said stores will not only face new restrictions on the number of customers allowed inside at any given time, but they’ll also be forced to take on additional costs for cleaning products to ensure everyone’s safety.
Recently released data from the U.S. Department of Commerce showed a more than 25% jump in grocery spending, but Caldwell said it’s what people aren’t buying that will have a lasting impact.
“Things like apparel and accessories were down almost 50%, and that’s very significant because apparel has much higher margins than groceries do,” she explained.
Caldwell said with millions of Americans filing for unemployment, families are more likely to batten down the hatches and buy only what’s necessary, which will directly impact retailers across the country.
“If the consumer doesn’t have confidence going out and spending because they might lose their job, you might not be willing to buy something more discretionary,” she said.
Many retailers are currently stocked with spring and summer items they can’t sell, and to make matters worse, Caldwell said the previous closures of factories in China means they also won’t have the supply of seasonal items and clothing they will need in the months to come.
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