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Since March, 12 major retailers have filed for bankruptcy and most have cited reasons that include, in part, the impacts of the coronavirus public health crisis. While many have been in financial distress for years, the pandemic pushed the industry into uncharted territory.
Most nonessential retailers in March temporarily shuttered their stores, either by choice or by government mandate, to help stem the spread of COVID-19. And while some retailers have begun reopening physical stores, it isn't likely sales will return to pre-pandemic levels in the near future. According to an estimate from Fitch Ratings, discretionary retail spending will decline up to 50% in the first half of 2020 and remain down during the second half of the year. The firm also predicts that sales in 2021 could be down as much as 10% from 2019 levels.
This likely isn't the end of the wave of 2020 bankruptcies and some sectors of the industry, like apparel, may be more vulnerable.
On this episode of the podcast, senior reporters Daphne Howland and Ben Unglesbee discuss the coronavirus' role in accelerating retail bankruptcies and how the consumer may change post-pandemic.
How COVID-19 accelerated the rate on retail bankruptcies
What sectors of retail might be more at risk
What the consumer might look like after the pandemic subsides