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Trade groups outline path to retail recovery

Retail Industry Leaders Association and National Retail Federation propose three-phase strategy for restarting the economy

As states begin to reopen their economies, leading retail trade groups urge the opening of all distribution centers and implementation of a three-phase reopening strategy. (Photo: Shutterstock)

As some states and political leaders push to quickly reopen retail stores and restart the economy, members of two leading trade groups supporting large retailers are urging a phased approach. The Retail Industry Leaders Association (RILA) and the National Retail Federation (NRF) have issued a Blueprint for Shopping Safe proposal that recommends distribution centers reopen nationally to ensure a smooth supply chain. It also documents a three-phase rollout for retail operations, based on specific guidance and data on a state-by-state basis.

Whether their proposed measures are enough to salvage the troubled retail sector is uncertain. Earlier this month, Pamela Danziger, a senior contributor to Forbes, noted major retailers that had their credit ratings downgraded by Fitch or S&P. Many were facing financial concerns before the COVID-19 pandemic but now face months of lost revenue — as much as 90% in some cases. They include J.C. Penney, Dillard’s, Kohl’s, Levi Strauss, Macy’s, Nordstrom, Tapestry (Coach and Kate Spade brands), L Brands (Victoria’s Secret), and Gap.

As of April 3, 190,000 physical retail locations had closed, accounting for more than 50% of U.S. retail square footage, according to Neil Saunders of GlobalData Retail. Still, retail will be back, and RILA and NRF are looking to ensure shoppers can return to stores and do so safely.

“As conversations turn to the reopening of the economy, retailers are uniquely situated to provide input, because we’ve been on both sides of the stay-at-home orders,” Brian Dodge, RILA president, said in a statement. “Groceries, pharmacies and other retailers that have remained open have implemented practices and protocols that are keeping employees and communities safe. The blueprint released today builds off those successful operating practices. Our goal is for the safe reopening of retail, and we want everyone, policymakers, employees and our customers to know that the industry is ready to shop safe.”

One of the keys is the ability to open up all distribution centers, which represents Phase 1 of the plan.

“A fully functioning supply chain with all distribution centers operational is crucial for retailers to meet the needs of customers. In addition to directing goods to store shelves, distribution centers are vital to e-commerce and other contactless forms of shopping,” the document reads.

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The groups support keeping proper safety protocols and social distancing procedures in place.

“Retailers [and restaurants] have established and implemented safety protocols to allow contactless pickup and in-home deliveries … . We believe these operations should be expanded to include retailers immediately across all states and jurisdictions, provided that retailers are following the established practices of social distancing, hygiene, and sanitization guidelines,” it read.

Retailers could advance to Phase 2 once state health departments and other health experts determine it is safe to do so. This phase entails the opening of additional stores “with robust health and safety protocols in place.”

“Uniform, statewide standards ensure the reopening of the economy is safe, efficient, and productive for customers, employees, and enforcement agencies alike,” the document advised.

Among the safety protocols the groups encourage for Phase 2 are social distancing, avoiding unnecessary touching such as handshaking, protective face coverings for both employees and customers as well as the uses of gloves for delivery or installation services, consistent and regular cleaning and disinfecting of surfaces in delivery operations, and limiting retail store occupancy based on square footage or store capacities.

Phase 3 would be the lifting of all restrictions, based on the proper installation of safety protocols including maintaining supplies of sanitization equipment and encouraging safe sanitation practices.

In conjunction with the Blueprint for Shopping Safe, NRF launched an online solution center as part of its Operation Open Doors. Based on input from its members, the efforts prioritize four “functional areas” for retail sectors: health and safety; people and personnel; logistics and supply chain; and litigation and liability.

Matthew Shay, president and CEO of NRF, sent a corresponding letter to President Donald Trump.

“Planning for and safely reopening retail and restaurant businesses — including returning teams and associates to physical locations — and welcoming customers back to stores and dining establishments is essential to a functioning and healthy economy,” Shay wrote, noting that the retail sector employs 25% of the nation’s workforce and comprises 70% of GDP in the U.S.

“As a community, retailers are preparing for new processes, consumer behaviors and legal requirements or restrictions, where there was once no playbook. Our country must not allow a lack of resources, regulations that are not fit-for-purpose, and the fear of litigation to delay efforts to return to work and live safely and sustainably,” Shay wrote.

The online solution center includes a 10-page Operation Open Doors checklist that details how operations can safely return to business.

Brian Straight

Brian Straight leads FreightWaves' Modern Shipper brand as Managing Editor. A journalism graduate of the University of Rhode Island, he has covered everything from a presidential election, to professional sports and Little League baseball, and for more than 10 years has covered trucking and logistics. Before joining FreightWaves, he was previously responsible for the editorial quality and production of Fleet Owner magazine and Brian lives in Connecticut with his wife and two kids and spends his time coaching his son’s baseball team, golfing with his daughter, and pursuing his never-ending quest to become a professional bowler. You can reach him at [email protected]