The Impact of Coronavirus on the Retail Supply Chain

There seems to be no shortage of threats and disruptions to the global supply chain. Whether it’s a natural disaster, political unrest, labor strife, a trade war or something else, supply chains are always under pressure. In order to deal with these and other unknown threats and challenges, it is critical that companies maintain their contingency plans to ensure they have the speed and flexibility to quickly react and keep supply chains moving.

The coronavirus is a global pandemic that is truly testing even the most sophisticated supply chains. When the virus outbreak began in China, the focus was on the impact the disruption would have to the U.S. import market and whether or not retailers would be able to get their goods. Retailers quickly began trying to assess the potential impact to their supply chains by working closely with product suppliers as well as transportation and service suppliers. With extended factory shutdowns and quarantines, retailers certainly expected delays, but it was unclear for how long or how much of an impact those delays would have.

As the coronavirus spread beyond China, it became more apparent that the impact would be worse than originally thought. Now that it is spreading quickly in the United States, the challenge for the supply chain has become the ability to keep stores stocked with essential products for U.S. consumers. Retailers certainly understand their role in fighting the pandemic and ensuring consumers have what they need during this difficult time: They continue to stock essential goods — food, cleaning supplies, paper products, etc. — as quickly as they can.

The challenge continues to grow as we see a proliferation of “shelter-in-place” orders in states that are shutting down “nonessential” business operations. We certainly believe the supply chain is an essential business. We also believe “essential” businesses should be defined broadly to include a wide swath of retail businesses to not only include grocery and pharmacy stores but also stores that provide essential goods such as pet food, tools and hardware, restaurants, consumer electronics, etc. It is becoming clearer that a national standard is needed as we see a proliferation of executive orders with different definitions of “essential” business.

One thing is clear moving forward: The coronavirus pandemic will force companies to reevaluate their supply chain operations to further ensure the health and safety of the workforce while ensuring business continuity to serve the ever-changing consumer.

Jonathan Gold, Vice President of Supply Chain and Customs Policy, the National Retail Federation

The National Retail Federation has represented retail for over a century.