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How can retailers respond to the impact of COVID19?

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Many retailers will be faced with difficult decisions and uncertainty for the future as they forecast the effects that the closing of stores is having on their business.

Despite many retailers, such as supermarkets and online providers like Naked Wines, benefitting from a recent upturn in sales, for the majority of retailers that are closed, they are suffering significant losses. For Primark, it is reported that its store closures across the world is costing them an average of £100m per month. It is currently unclear when retailers will be able to reopen, and the longer stores are closed, the more likely it is that retailers will have to consider taking drastic measures if they are to survive the storm.

We are focusing on how retailers might put themselves in the best possible position to respond to the crisis and mitigate the negative impact on its business through good workforce planning with our six R’s: 


Reorganising staff to an area that is still operating. For example, retraining and redeploying staff from in-store to e-commerce assistance to cope with the online demands or retraining support staff to assist in the warehouses and distribution centres.   


Reducing core hours of staff will enable retailers to retain more staff during a period of uncertainty. Check employee contracts and consider whether changes to terms and conditions are required. Are there provisions for lay off or short time working? If not, consider variation of terms and conditions by mutual agreement or terminating and re-engaging the employees on new terms (and swot up on collective consultation obligations). Where retailers have casual or agency staff, there is generally no obligation to offer work. Retailers can also seek to make reductions in other areas by considering rent negotiations or flexible plans with suppliers.


With retailers being severely impacted by the store closures, redundancies are likely. At the current time, most are utilising the Government's Job Retention Scheme which might delay inevitable job losses. Consider the right process for your business and make sure you comply with any obligation to file an HR1. 


Consider whether taking early advice from our restructuring team is appropriate to review options for businesses in financial distress. Retailers may have the option to engage with its lenders to refinance loans, amend financial covenants or consider entering a voluntary arrangement with creditors.


Retailers may be in a position to diversify business in innovative ways by focusing on e-commerce, marketing, PR, volunteering to help the community and being flexible with employees and suppliers. Retailers should consider whether there is any scope to improve its market position by assessing their competitors and reshaping their current model. For those in a relatively strong financial position there may be opportunity to merge with or acquire competitors at a discounted price. Our Gateley Corporate team are well placed to assist.


It is anticipated that the reopening of stores may occur in stages and social distancing measures are likely to continue. Replan what stores will look like for workers and customers: less staff; more floor space; queuing systems; contactless payments and receipts; different shift patterns; and stringent health and safety and hygiene measures are all expected. Are you ready with the products and equipment you will need and are you keeping abreast of the latest Government guidance? 


Bouncing back from this crisis will require leaders to lead and employees to be motivated to make the most of the opportunities that are presented. Developing strong leaders that can support the workforce is essential; colleagues will need to be reassured to avoid uncertainty and below par performance. Our consultants within T-three and Kiddy & Partners are well placed to assist with leadership strategy, assessment and development.


Lessons can be learnt from this crisis on how organisations can operate differently. Resilient businesses will take the opportunity to reflect on this crisis and identify learning points that will make their businesses stronger in the future.

Further guidance

For further guidance regarding retailers response to COVID-19 please contact one of our experts listed below.

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