New York City has seen almost one in seven nationally recognized chain-store branches close their doors in 2020 as the COVID-19 pandemic ravaged the country and sent consumers scurrying for cover, according to a latest industry report.
A record high 1,057 chain stores, including 70 Duane Reades, 49 Starbucks and 22 Papyruses, have ended their businesses over the past 12 months, said the Center for an Urban Future's annual "State of the Chains" report released this week.
The 13.3 percent decline shatters all previous records reported by the nonprofit agency since it began tracking the data 13 years ago. Last year, just 3.7 percent of all chain outlets closed, up from 0.3 percent in 2018.
"If the national chains are scaling back like this, I have to imagine it's twice as bad for mom-and-pop stores, who don't have the same ability to weather a storm or get access to financing," the center's executive director, Jonathan Bowles, was quoted by the New York Post as saying.
Among the five boroughs of the city, Manhattan absorbed the deepest cuts with 520 chain closures, almost half of the city total, due to the borough's dependence on office workers, tourists and wealthy residents who have decamped to homes outside the city, said the report.
Among the hardest-hit sectors were sandwich shops that cater to office workers, many of whom since March have been able to work from home, according to the report.
Meanwhile, some 40 chains actually added locations, led by Popeyes fried-chicken fast food, which added 11 new eateries.
Bowles believes there's a chance that much of the food-sector decline is only temporary, assuming a large number of workers return to their offices when the pandemic eases.
A huge surge in online shopping during the pandemic has been a savior for retailers, but it comes at a price.
Shoppers are expected to return twice as many items as they did during last year's holiday period, costing companies roughly $1.1 billion, according to Narvar Inc., a software and technology company that manages online returns for hundreds of brands.
Retailers don't want the returns, but they do want shoppers who may not feel safe going to stores to be comfortable buying things they haven't seen or tried on in person.
People have been doing so much online buying since March that carriers like UPS and FedEx were already at full capacity before the holiday shopping season. And online sales just keep soaring. From Nov. 1 though Tuesday, they spiked 32% to $171.6 billion, compared with the year-ago period, according to Adobe Analytics. The massive challenges of shipping COVID-19 vaccines in the weeks and months ahead could put further pressure on the system.
That means shoppers who return items may not get refunds until two weeks after they're sent back to the store, said Sara Skirboll, shopping expert at deals site RetailMeNot.
Many companies are offering more locations where customers can drop off returns, which cuts down shipping costs and gets refunds to shoppers more quickly.
Last year, Kohl's began allowing Amazon returns at all of its 1,000 stores — customers drop off items for free, with no box or label needed. This year, Amazon customers can also return items at 500 Whole Foods Market stores. That's in addition to Amazon's deal with UPS to allow similar drop-offs at UPS stores.
Happy Returns, a Santa Monica, California-based startup that works with about 150 online retailers like Rothy's and Revolve, has increased its number of drop-off locations to 2,600, from more than 700 last year. That includes 2,000 FedEx locations.
"It's a great time to be in the returns business. Every day, there's a record," said David Sobie, CEO and co-founder of Happy Returns, noting he's processed 50% more returns in December than November.
Walmart, the nation's largest retailer, announced earlier this week it will pick up items shipped and sold by Walmart.com from customers' homes for free through a new partnership with FedEx. The service will continue beyond the holiday shopping season.
A growing number of retailers are asking shoppers to not even bother sending back certain rejected items.
When Dick Pirozzolo wanted to return a too-small jersey he bought for $40 on a website called Online Cycling Gear, he was pleasantly surprised with the response. The site told him to keep it, discard it, or give it to a friend or charity — and it will send him the right size for an extra $10.
"I was fine with that," said the 77-year-old cycling enthusiast from Wellesley, Massachusetts. "I did a good thing for a friend, and I got a new shirt." The experience, he says, has given him confidence to buy more online this holiday season.
David Bassuk, global co-leader of AlixPartners' retail practice, says stores are increasingly making it easier for shoppers to feel less guilty about returning items.
"If they're not sure of their size, they order both sizes," he says. "If they're not sure which color, they order both colors. And if they're not sure which item, they order them all. But it's costly to the retailers, and the retailers are not well positioned to handle all the cost."
On average, people return 25% of items they buy online, compared with only 8% of what they buy in stores, according to Forrester Research's online analyst Sucharita Mulpuru. For clothing it's even higher, about 30%.
But not all rejected items are the same and have varying levels of depreciation, experts say. After an item is sent back to the retailer, the company must assess its condition and decide whether to resell it, send it to a liquidator or the landfill.
Optoro, a return logistics company, estimates the value of fashion apparel depreciates by 20% to 50% over an eight-to-16-week period. That's why it's so critical to get rejected items back and on sale again quickly.
Returns are also complicated this year because retailers pushed people to buy holiday gifts early to avoid shipping delays and crowded stores, meaning the return window may be closed by the time Christmas rolls around.
Amazon is allowing customers to return items until Jan. 31 for items shipped between Oct. 1 and Dec. 31, giving customers more time to decide. Last year, the policy didn't include items shipped in October.
Rachel Sakelaris, 25, of Newport Beach, California, bought her boyfriend a waterproof backpack on Black Friday, then realized there was a 30-day return policy. She decided to move up the gift exchange to last weekend so he had time to return if he didn't like it.
Buying too early can come with other hazards.
Sarah Huffman, 40, of Chesapeake, Virginia, wanted to get a jump start on the holiday season and spent $600 on Amazon on gifts, including a $60 pair of pajamas and a $90 Xbox game for her five children, in May.
But then her husband, a disabled veteran, quit his job because he felt his boss was too lax with COVD-19 safety protocols. Now, her family is struggling to put food on the table, and she can't return some of the gifts she bought because the return window has lapsed.
"I was trying to take away the stress of the pandemic by buying early," she said. "I didn't realize that basic life choices would find a new low."
Despite a sharp fall in global trade in 2020 due to the coronavirus pandemic and lingering trade tensions, Asia and the Pacific is expected to perform relatively “less bad” than the rest of the world, the United Nations development arm in the region said on Tuesday.
Worldwide trade is expected to fall by 14.5 per cent in 2020 and following that trend, trade in the region could contract by 1.9 percent, estimates from the UN Economic and Social Commission for Asia and the Pacific (ESCAP) suggest, UN News reports.
The rest of the world, however, fared worse, and as a result Asia-Pacific’s share in global merchandise export and import is expected to rise to an all-time high in 2020, to 41.8 percent and 38.2 percent respectively, up from 39.9 percent and 36.9 percent a year earlier.
Resilience is key
The UN body also cautioned that the path towards a full trade recovery remains “highly uncertain”, with unfavourable macroeconomic conditions in many economies along with high unemployment, debt and deflation, and underlying structural challenges impeding rebound.
Smaller economies face additional obstacles due to the pandemic’s impact on travel and tourism, and remittances.
According to Armida Salsiah Alisjahbana, Executive Secretary of ESCAP, COVID-19’s “devastating effect” on both developed and developing economies also risks pushing millions back into poverty.
“I urge countries in the region to work towards developing a better set of trade rules that are resilient in times of crisis and stimulate sustainable economic recovery for inclusive and greener economies.”
Investments also hit
Alongside trade, foreign direct investment (FDI) also saw “immediate and significant” impacts of the global crisis.
“While data is still being collected on all forms of FDI, quarterly figures from announced ‘greenfield’ investments clearly demonstrate how hard the region has been hit,” ESCAP said, referring to investments into projects starting from scratch.
In the first three quarters of 2020, “greenfield” FDI dropped by 40 per cent compared to the same period in 2019, depressed primarily by the impact of lockdowns resulting in delayed and canceled projects.
ESCAP added that FDI is expected to remain below pre-crisis levels throughout 2021, with the future outlook “highly uncertain” and dependent on the duration of the crisis, the effectiveness of policies to stimulate investments, and recovery from socio-economic effects of the pandemic.
The trade updates are an annual ESCAP publication to support countries develop short-to-medium term plans to respond to emerging risks and uncertainties in the global and regional economies.
Established in 1947, ESCAP is the largest of the UN’s five regional commissions – both in terms of geographic coverage and population served – its membership spanning from the Pacific island nation of Kiribati in the east, to Turkey in the west, and Russia in the north, to New Zealand in the south.
Deep into a crucial weekend of negotiations, a breakthrough on fishing rights remained elusive for the European Union and Britain, leaving both without a trade agreement that would dull the edge of a chaotic, costly economic break on New Year’s Day.
With hundreds of thousands of jobs at stake throughout the economy, the tiny sector of fisheries continued to drive a wedge between the 27-nation bloc and the U.K., highlighting the animosity that drove them to a Brexit divorce over the past four years. Britain left the bloc in January but a 11-month economic transition period ends on Dec. 31.
British Prime Minister Boris Johnson’s office said Sunday that the EU is “continuing to make demands that are incompatible with our independence. We cannot accept a deal that doesn’t leave us in control of our own laws or waters.”
The almost mythical sense of Britain’s rights to rule its waves was an essential part of what drove Brexiteers to victory in the 2016 referendum. Johnson is seeking to make sure that as much as possible of the shared British waters are now returned to U.K. vessels only.
The EU has always maintained that those waters have been shared for decades, if not centuries, and insists if too many fishing rights are taken away, it will punish Britain by imposing hefty import fees to the mainland market, which is essential to the U.K. seafood industry.
The stalemate has left the overall talks inconclusive with businesses on both sides clamoring for a deal that would save tens of billions in costs. Johnson, though, could not be budged.
“We need to get any deal right and based on terms which respect what the British people voted for,” his office said.
The EU parliament needs to approve any deal before the end of the year and had set a Sunday night deadline so it could have a cursory vetting of the deal and approve it before New Year’s Day. Negotiators, however, seemed little impressed by yet another deadline when so many had already been missed during the four-year departure process.
One official from an EU coastal nation said the EU was refusing to yield more than a quarter of the fishing quotas the bloc stands to lose now that Britain is regaining full control of its waters due to Brexit. Britain is also steadfast that a 3-year transition period would be long enough for EU fishermen to adapt to the new rules, while the EU wants at least six years.
The official spoke on condition of anonymity because the talks were still ongoing.
A failure to reach a post-Brexit deal would lead to more chaos on Britain’s borders with the EU at the start of 2021, when new tariffs would add to other impediments to trade enacted by both sides. The talks have bogged down on two main issues over the past days — the EU’s access to U.K. fishing waters and assurances of fair competition between businesses.
A trade deal would ensure there are no tariffs and quotas on trade in goods between the two sides, but there would still be technical costs, partly associated with customs checks and non-tariff barriers on services.
While both sides would suffer economically from a failure to secure a trade deal, most economists think the British economy would take a greater hit, at least in the near-term, as it is relatively more reliant on trade with the EU than vice versa.
Bangladesh's foreign exchange reserves have soared past 42 billion US dollars amid the Covid-19 pandemic, the central bank's latest data showed.
According to the provisional Bangladesh Bank (BB) data, the country's foreign exchange reserves stood at 42,094.90 million US dollars as of Dec. 15 after reaching 41,269.02 million US dollars at the end of November.
According to BB's Forex Reserve and the Treasury Management Department data, this is the highest level of forex reserves Bangladesh has ever held.
Bangladesh's foreign exchange reserves crossed the 41-billion-US dollar in October amid a slump in import bills due to the Covid-19 pandemic that made businesses also sluggish in Bangladesh.
Experts said the current reserve level is good enough to support Bangladesh's resilience to external odds, as well as to maintain macroeconomic stability in light of the unabated Covid-19 outbreak.
They said Bangladesh is in a position to pay more than 10 months' import bills with the existing reserves, which are also enough to help the central bank's efforts in keeping the foreign exchange market stable despite the economic impacts of the pandemic.
According to figures reported by the Directorate General of Health Services under the country's Ministry of Health and Family Welfare on Saturday, the number of confirmed Covid-19 infections in Bangladesh totaled 499,560 while fatalities stood at 7,242.