A recent study by UK consultancy firm Retail Economics and global law firm Squire Patton Boggs shows more than half of retailers surveyed have experienced supply chain issues resulting from the novel coronavirus outbreak. Almost a quarter– ranging from food, fashion and health and beauty businesses–say the disruption is significantly affecting their business. Yet only 7 per cent of the retailers have flexible enough supply chains to be able to switch suppliers, according to a press release from UK-based Retail Economics. If the virus persists, 24 per cent of them believe it could lead to a permanent change in their business, including switching suppliers, investing more into online operations, reviewing contracts, and risk mitigation. But above supply issues, retailers are most concerned about the damage the virus could have on consumer confidence. Forty five per cent of retailer respondents have already seen a negative impact on sales, while three quarters of them expect a negative impact on sales if the virus persists. A separate survey among UK households revealed that over a third (39 per cent) of consumers are worried about product shortages as a result of the outbreak, which has led to almost one in ten consumers (9 per cent) to stockpile. More than a third (36 per cent) now consider the virus a high threat, up from less than a quarter (23 per cent) in a previous survey conducted. There is now a greater willingness to sacrifice holiday plans. Over a quarter (28 per cent) of people are currently avoiding travel abroad, which could rise to nearly half (45 per cent) of consumers if the virus persists. Given that UK households spend just around £2,200 on holidays abroad per year, this could put £25 billion at risk of not being spent on travel overseas. Fifteen per cent UK residents are currently avoiding public transport, 23 per cent are avoiding contact with other people, and 9 per cent are avoiding restaurants and entertainment destinations. If the virus persists, 34 per cent of consumers would consider avoiding public travel, while 29 per cent would avoid restaurants and entertainment destinations, and a quarter would avoid shopping destinations. Resultantly, online retail could benefit. Half of the shoppers surveyed would consider buying more online to avoid physical shops if the virus persists, although one in two would try to avoid buying online from international sellers that ship products directly from China.
