ALEXANDRIA, Va.—A change in mask-wearing guidance from the U.S. Centers for Disease Control and Prevention on July 27 has revived U.S. pandemic concerns due to the spread of the delta variant that seemed to be on the wane a few months ago. The CDC is now urging even vaccinated individuals to wear masks indoors in areas with high COVID-19 transmission rates.
Despite the news, it’s unlikely that lockdowns like the ones in 2020 will be repeated. Still, the delta variant is already affecting retailers in three fundamental ways, RetailDive.com reports.
The CDC's renewed mask recommendation, which extends guidance from May to include both vaccinated and unvaccinated people, revives a tricky issue for retailers.
"Public health and safety are always the No. 1 priority for retailers large and small," the National Retail Federation said in a statement. "To be sure, retailers will continue to follow the guidance of the CDC and other public health experts to protect our associates, their families and our customers. We want every business to remain open, we want to keep people employed, and we want to ensure that consumers have access to the goods and services they expect and need."
The United Food and Commercial Workers union, which represents 1.3 million food and retail workers, called the CDC's new mask policy "critical" but said it didn't go far enough. "With [COVID-19] cases continuing to surge, essential workers have been forced to play vaccination police because of the confusing patchwork of state and local mask policies," said Marc Perrone, president, UFCW International, in a statement. “Urgent action is needed from states and retailers to strengthen [COVID-19] safety enforcement so the burden doesn't fall on the shoulders [of] essential workers already stretched thin.”
2. Consumer Confidence and the Economy
Jerome Powell, Federal Reserve chairman, believes that thanks to vaccines, a variant or surge of COVID-19 probably won’t hurt the economy the way the pandemic did last year, although it could slow the economy.
"You could imagine school districts deciding to wait a month or two for the delta wave to quiet," he said. "It's also easy to imagine that some people might say, 'You know what ... I'm just going to wait a couple of months before going back to work.' ... If schools don't open, then caretakers have to stay home, and if people don't go back into the labor force, then the job growth won't be as strong, those kinds of things."
There are some signs that consumer confidence is wavering. Last week, Morning Consult's Index of Consumer Sentiment was down 4.6 points from July 1, coinciding with the recent pandemic surge. That’s the lowest reading since March 9 and the sharpest three-week decline since November. The greatest decrease was in the West, where the delta variant is strong, although the jobs index and purchasing confidence were unchanged from the previous two weeks. Concerns about the delta variant also contributed to store traffic declines in July, according to RetailNext research.
3. Supply Chain
Retailers were quick to shift amid the pandemic’s hit to demand and the upheaval in manufacturing and shipping, which sparked inventory issues. Supply bottlenecks and shortages have led to inflation, which could mean bigger problems for consumer spending and the wider economy.
"The delta variant is on the rise, and we are not turning a blind eye to rising [COVID-19] case counts or [are] of the belief that the pandemic is over," economists Sarah House, Tim Quinlan and Shannon Seery wrote in emailed comments to RetailDive. “That said, inflation has edged out [COVID-19] as the predominant concern among financial markets, businesses and households for the better part of this year.”
NACS has compiled resources to help the convenience retail community navigate the COVID-19 crisis. For news updates and guidance, visit our coronavirus resources page.