U.S. retailers are taking steps to prepare for impact from the coronavirus

Some multinational companies operating in China have closed stores and offices

It’s a fundamental retail business practice: Hope for the best; prepare for the worst. And retail companies are doing just that.

Based on the evolving information provided by the Centers for Disease Control and Prevention and the World Health Organization, U.S. retailers are taking steps to prepare for any impact from the coronavirus, otherwise known as 2019-nCoV. At this point those preparations stress the importance of hygiene, with the majority reaffirming the need for employees to practice frequent handwashing, directing coughs or sneezes into one’s elbow and staying home if they’re not feeling well.

Retail companies and tech power players operating stores or offices in the areas of China where the disease is concentrated have taken more assertive action to prevent further spread of the virus.

Starbucks, McDonald’s, KFC and Pizza Hut have temporarily closed stores in select locations. Walt Disney Co. has temporarily closed its Shanghai Disneyland park and its store in Shanghai, and IKEA and Uniqlo have shut down stores across China. Google offices had closed for the Lunar New Year and will now be closed for the foreseeable future. Microsoft, Apple, Amazon and Facebook have advised employees in China to cancel all non-essential business travel.

The facts about the spread of coronavirus are disquieting. There are now more than 8,200 confirmed cases globally and more than 170 deaths in China resulting from the virus. It has spread to 22 countries and territories from its origin in Wuhan, China. On Thursday, the W.H.O. declared the coronavirus outbreak a global public health emergency, a move that seemed to ratchet up public anxiety.

There are currently six patients in the United States who have tested positive for the virus, with the CDC confirming the first human-to-human transmission of coronavirus in Illinois. Symptoms of the virus include fever, cough and shortness of breath. In addition, the number of confirmed coronavirus cases across the globe has now outpaced the total number of infections over the nine-month SARS (severe acute respiratory syndrome) outbreak in less than one month.

While the situation remains fluid, the CDC believes the immediate risk of the coronavirus becoming a pandemic in the United States remains low.

Still, while the situation remains fluid, the CDC believes the immediate risk of the coronavirus becoming a pandemic in the United States remains low. CDC officials anticipated the spread of cases from Wuhan and central China and began implementing screening through international airports in mid-January. By the end of the month, officials increased travel warnings and expanded screening to 20 U.S. airports in an ongoing effort to contain the outbreak.

For that reason, most U.S. health officials do not believe the situation in China will be replicated here. Dr. Nancy Messonnier, who leads the CDC’s National Center for Immunization and Respiratory Disease, noted during a January 27 webinar that the “immediate risk remains low.” She stressed that the CDC is continuing to evaluate the situation and update data on its website, however, “simple everyday precautions” make the most sense right now.

Robert Moraca, NRF’s vice president of loss prevention, points out that retailers have faced similar situations in the past, including SARS and Ebola, and are no strangers to deploying steps to counter the spread of a pandemic.

“Every retailer has what’s known as an ‘All Hazard Plan.’ It’s comprehensive in detail and it breaks down not just the basics of business continuity, but specific actions tied to whether they’re facing a natural disaster or something different. If a pandemic were to occur here in the U.S. — and clearly there is no indication of that right now — retailers have detailed plans outlined that they can quickly deploy,” Moraca says.

“One of the steps we would likely see put in place is social distancing, which is the public health practice of encouraging people to keep their physical distance from each other during disease outbreaks in order to slow the spread of infection. Other preventive measures might include masks or rubber gloves.”

Moraca says the best course of action right now is to follow the CDC guidelines and take advantage of the opportunity to download best practices and posters from the CDC’s website, which retail businesses can post in restrooms and employee break areas.

One facet of retail operations already wrestling with some ripple effects is supply chain. With a large percentage of manufacturers and retail companies doing business in China, the potential impact of the coronavirus on supply chain processes is likely to be felt before other aspects of business.

Retailers are “working closely with all of their supply chain partners from vendors to transportation providers to determine the impact and the best course of action going forward,” says Jon Gold, NRF vice president of supply chain. “It’s important that retailers stay informed and in close contact with their partners in order to respond as quickly as possible with minimal supply chain disruption.”

Deborah Weinswig, Coresight Research CEO and founder, spends a significant portion of her time in China and Hong Kong working closely with supply chain providers, technology companies and retailers. She notes that while the number of people testing positive for the coronavirus continues to expand rapidly, the Chinese government and several provinces extended the Lunar New Year holiday to contain its spread. Like Gold, she reports that many people around the globe are collaborating to figure out next steps.

“Many companies have encouraged employees to stay home for a couple of weeks, and many venues such as restaurants, coffee shops and fast-food restaurants have closed in Hubei Province. We expect these closures to extend outside of Hubei in the coming weeks,” she says.

“In addition, empty shelves in China continue to be the norm as consumers stocked up for the holiday and to prepare for an extended time at home. The lack of consumers in bricks-and-mortar establishments continues to adversely affect demand.  However, Chinese consumers have always greatly relied on ecommerce, which will likely be amplified in the current environment.”

Weinswig believes retailers doing business in China will have to reconfigure their supply chains to emphasize ecommerce and deemphasize bricks-and-mortar until the virus has subsided and people feel comfortable returning to public spaces. “Retailers and brands have a significant opportunity to offer gamification of retailing on mobile and drive traffic and sales,” she says. “This is a true opportunity for partnership and collaboration to drive sales and help residents in China persevere in the current times.”

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