How European Retailers Can Manage COVID-19 Disruption and Make It to the Other Side
Only a few months ago shopping with friends or family was a normal part of daily life, yet now it is considered a potentially perilous excursion for many of us. COVID-19 stunned our economy and shuttered vast portions of the retail sector, with physical retail footfall reportedly dropping by c.80% at its peak. With restrictions eased, retailers across Europe need to learn to manage through the continued downturn, be prepared for a potential second wave and adapt to an uncertain future.
Retailers are familiar with business continuity plans — they are annual exercises for many retailers, given extreme weather events, distribution centre closures and other local disasters. However, few, if any, retailers planned for a black swan event that would close the entire store fleet for weeks.
In this article, our Business Transformation team looks at how European retailers will adapt to the disruption caused by COVID-19 and what key measures they should be considering to make it to the other side.
Now that the next phase of eased restrictions is upon us and non-essential retailers have re-opened stores, companies must shift their attention to managing through the downturn, and being well-positioned to emerge from the pandemic environment. There are a number of important steps that businesses should take to protect and strengthen their position, including communicating with customers; optimising operations; monitoring the likely state of recovery; strategising and stress-testing exit plans; launching public affairs programs to mitigate any scrutiny associated with government relief assistance, and clearly articulating mitigation plans to stakeholders.
Given the current challenges and unprecedented levels of uncertainty, retailers must adopt scenario-based long-term strategic planning along with a short-term cash flow mindset, whilst ensuring agility and resilience are at the core. Things will be different for the foreseeable future, and retailers need to be prepared to adapt to a new reality that we cannot yet completely envision, but one that almost certainly will heap new challenges upon an already beleaguered industry.