Analyst slams new rules preventing Costco, Walmart, and Target from selling from selling 'nonessential' items such as toys and clothing in certain parts of the US
- Costco, Walmart, Target, and other retailers have been barred from selling certain nonessential goods in parts of the US.
- The rules are meant to reduce crowding amid the coronavirus.
- But Neil Saunders, the managing director of GlobalData Retail, says the restrictions are burdensome and show "a total ignorance of how retail works."
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Governments in parts of the US have ordered retailers including Costco, Walmart, and Target to stop selling certain nonessential goods, such as clothing, furniture, toys, and paint, in stores.
The restrictions are meant to reduce shopper traffic in stores, but Neil Saunders, the managing director of GlobalData Retail, says these rules show a "complete lack of understanding" of how retailers operate.
Saunders highlighted four problems with banning nonessential goods in stores in an email to Business Insider. He also shared his thoughts on Twitter.
- Stores can't handle higher volumes for pickup and delivery of online orders. "It is fine for authorities to recommend online ordering as a replacement, but most stores are already struggling to cope with both pickup and delivery so it is not at all clear how they'd cope with even higher online volumes as a result of nonessential sales restrictions," Saunders wrote.
- The line between essential and nonessential is "very arbitrary" and if the government becomes too restrictive, it could lose the support of the public. "Generally, the public has been supportive of the [coronavirus] restrictions as they see them as prudent and measured," Saunders wrote. "However, if government becomes too dictatorial and unreasonable in their actions that support could start to wane."
- The extra restrictions are burdensome. "It is hard enough keeping an essential retail business running these days, without adding more regulations for them to follow."
- Some officials have suggested that stores remove nonessential goods from the sales floor, but there's no space to store these goods. "Even suggesting that retailers can remove all the nonessential stock from the floor shows a total ignorance of how retail works," Saunders wrote. "There is not enough stockroom space for this, especially as there are more essential products coming down the supply chain."
David Henkes, a global food and beverage consultant for Technomic, has also highlighted issues with government officials determining what goods or stores are essential.
"Anything that has a broad food or beverage designation or sells those types of products is considered essential and [it] becomes almost impunitive at some point to say, 'Well, we're going to exclude beverages [like] alcohol,'" he said, referring to the decisions in some areas to deem liquor stores nonessential.
But some government officials say the rules are meant to protect shoppers and employees.
"Large 'big box' retailers generate significant shopping traffic by virtue of their size and the variety of goods offered in a single location," Vermont Agency of Commerce and Community Development Secretary Lindsay Kurrle said in a statement on March 31. "This volume of shopping traffic significantly increases the risk of further spread of this dangerous virus to Vermonters and the viability of Vermont's health care system."
Vermont has banned the sale of goods including arts and crafts, beauty supplies, carpeting, clothing, electronics, furniture, jewelry, and more in stores that remain open.
