COVID-19: what do US retailers' new face mask policies mean for the sector?

Date : 16 July 2020

Stewart Samuel

Program Director - Canada

As coronavirus cases spike in the US, several major US retailers will require shoppers to wear face masks. We look at what this means in terms of the intensity of the coronavirus pandemic in the the country.

Bringing consistency across their operations

Following Walmart's annoncement earlier in the week, several other US retailers have announced face mask mandates, including Kroger and Albertsons. In many areas, there are already some form of government mandate on face coverings. This will deliver consistency across their operations and support efforts to reduce the number of cases in the US. Publix, CVS Health and Walgreens are also introducing similar mandates. 

Source: Walmart

Rolling back re-opening plans

While many retailers already have similar mandates, this initiative highlights the challenging environment in the US. Over recent days, US confirmed cases have exceeded 3.4m, with over 136,000 deaths. Major states including Florida, Texas and Arizona have seen a major up-tick in cases, with most states reporting rising cases. California has been rolling back re-opening plans, closing bars and indoor dining spaces in some counties.

New behaviours becoming ingrained

The resurgence of cases in the US will lead to a slower return to normality. Many school districts have announced that classes will remain online in the fall, while several employers, especially in the tech industry, have extended work from home measures into 2021. The prolonged nature of the crisis could lead to many of the new shopping behaviours and channel shifts to become more ingrained. This is likely to benefit grocery ecommerce, which has seen significant growth, with retailers reporting growth rates ranging from 75-100%. As new shoppers use this channel over an extended period of time, they are more likely to become regular users.

Managing the supply chain

The elevated demand which food retail is currently experiencing will also be extended. Most suppliers are benefitting from the shift to at-home consumption, although many are at full production capacity to support this. Currently it is challenging to rebuild retail inventories ahead of the key holiday season and to support any potential spikes in demand later in the year. The uncertainty on the duration of the crisis also makes planning more challenging.

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