What’s An Essential Retailer During A Pandemic? Depends Who You Ask

There is a very precise definition for what are essential goods today. But for many retailers, the definition is whatever they sell.

As some states start to allow retail stores to reopen and others contemplate similar actions, the question of what is essential—and what isn’t—is becoming ever more critical.

While more than 150 larger retailing companies have closed down entirely because of the coronavirus and scores of others are shut locally, a sector of retailing has remained open for business. In the most obvious examples, stores selling food, drugs and household basics have been allowed to continue in operation, and these retailers are also for the most part selling anything else they carry. Then there is the class of retailers that fall into a gray zone of essential products: liquor, cannabis, sporting goods, dry cleaning, auto parts, pet supplies and books. Most of these have remained open, too.

Finally, there are the retailers selling merchandise that most people would say are nice but hardly essential: hobbies, crafts, musical instruments and furniture.

As the coronavirus pandemic stretches into months and the nation’s economy teeters on paralysis, the issue of which retailers are allowed to stay open and sell is getting more complicated. Some states are putting restrictions on what the retailers that are open can sell; in other areas, some stores are being forcibly shut down as the meaning of what’s essential is further refined.

For retailers and the companies that supply them—not to mention shoppers trying to navigate the patchwork of rules and regulations—the business of retailing has never been more complicated.

The numbers on closed stores are simply staggering. The Coresight research group reports around 630,000 outlets have been forced to close in a process that began in mid-March and has pretty much continued unabated. The National Retail Federation estimates that $430 billion in retail sales will disappear over the next three months.

Some big national retailers like Nordstrom, the TJX brands and Williams Sonoma moved pretty quickly to close while others like Dillard’s and Sears were among the last larger operations to finally shut down.

On the flip side are the two big national discounters, Walmart and Target, which are benefiting from their grocery businesses as well as their household basics assortments. Even with social-distancing requirements, they are holding up well.

But now their ability to sell non-essential goods is being questioned. Vermont was the first state to move on this in early April when the state’s Agency of Commerce and Community Development told big-box retailers to “cease” in-person sales of non-essential goods. In other areas, retailers are being told to stop promoting non-essential goods even if they are still allowed to sell them.

Other localities are also reacting to the issue of what’s essential. Several weeks ago, a Dallas county judge issued cease-and-desist orders to Hobby Lobby, requiring it to close its stores within his jurisdiction. “I just want to make it clear to Hobby Lobby and anybody who is foolish enough to follow in their footsteps,” he was quoted as saying in the Dallas News, adding “that in Dallas County, the government—and 99.9% of the business community—puts public health over profits.”

Hobby Lobby had attracted much attention earlier when its owner was reported as saying the store was staying open after his wife received a message from God instructing them to do so.

Some other stores selling arts and crafts products have said they were staying open because they sold materials that could be used to make personal protection products like face masks. Others in the hobby category said they provided products like games and puzzles to help families cope with staying at home. Adding to the confusion is that stores selling these products may be closed in one town or county but open in the next.

According to the Dallas News report, the Dallas county judge said that arts and craft stores aren’t deemed essential businesses under the Critical Infrastructure Security Act and that by remaining open, those stores “are in violation of my order and, come Friday at midnight, Gov. Abbott’s order.”

The inconsistency is rampant throughout retailing. Dick’s Sporting Goods is closed, but competitor Academy is open. (Note that there are many exceptions to open store policies contingent on both local laws and whether the shopping facility they are in has been shut down by its operator.) Furniture, home furnishings and mattress retailers like Badcock, Mattress Firm and RC Willey continue to operate (again, with exceptions) while Bed Bath & Beyond, RH, Ethan Allen and Ikea are all closed.

The arguments over what is and isn’t essential even extends beyond retailing. In Florida, Governor Ron DeSantis, who has come under heavy criticism for not shutting down the state’s beaches until after spring breakers had created highly contagious situations, signed an executive order allowing a professional wrestling match to be held. Even with virtually every pro sports league shut down, DeSantis said wrestling was “critical to the state’s economy.”

Regardless of your opinions on pro wrestling, the retail business is stuck with a hodgepodge of what is considered essential and what isn’t. The National Retail Federation has asked President Trump to issue more precise rules, but as with most things to do with this pandemic, the federal government is taking a backseat to states and local authorities.

As some stores begin to open their door again, the debate over what is essential will begin to be moot. But until that time, it remains one more side effect of a national crisis that continues to plague both the people and the economy.

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