Melbourne shoppers cram stores as lockdown looms


Shoppers have been filmed lining up at a Melbourne market as the city – and the whole state of Victoria – awaits news on tough new restrictions.

It comes as Premier Daniel Andrews prepares to detail a stage 4 lockdown for the capital and new measures through regional communities, with more than 650 new cases of COVID-19 to be announced.

It’s understood that today will mark a new record number of deaths.

Racing.com editor in chief Paul Tatnell shared incredible vision on Twitter on Sunday of South Melbourne Market.

“Lockdown panic is well and truly alive,” he said. “Shortage of meat and staples already. One shop likened it to the Christmas rush.”

RELATED: Follow our latest coronavirus updates

Supermarkets across the city have seen long queues of people today as news of the imminent lockdown spread.

While details are not yet confirmed, it’s believed that most retail stores and businesses will be forced to close within coming days under the new measures.

Supermarkets, considered essential services, will remain open but under strict social distancing and health rules.

More to come …



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Coronavirus case increase sees Woolworths encourage masks in NSW, ACT and some Queensland stores


Woolworths has announced customers and staff will be “strongly encouraged” to wear facial coverings in NSW, ACT and some Queensland stores from next week due to the increase in coronavirus cases.

Woolworths released a statement on Thursday saying the request would apply to its supermarkets, metro stores, Big W, Dan Murphy’s, BWS and ALH Hotels from Monday.

New South Wales has seen 150 new cases of coronavirus cases across the last fortnight and has issued public health alerts for multiple venues across Sydney after confirmed cases.

An epidemiologist has urged Sydneysiders to wear face coverings on public transport, but the NSW Government has ruled out making them mandatory for now.

Woolworths chief executive Brad Banducci said the request was for the “safety and wellbeing of our customers, teams and communities”.

“Even though wearing a face covering is not mandatory in NSW, ACT or Queensland, as the largest private sector employer with stores in almost every community, we feel it’s important we lead the way in helping reduce community transmission of COVID-19,” he said.

“We’re asking our teams to lead by example, and this includes our group executive team.

“Masks and face coverings are a highly visible symbol of the persistence of COVID-19. By encouraging and role modelling their use, it will further support the steps we need to collectively take to stop the spread of the virus and keep our team and customers safe.”

Woolworths also “strongly encouraged” customers and staff at Woolworths Group stores “within hot spot areas” in Queensland to wear facial coverings from Friday.

Queensland Health has launched a contact tracing and testing response in Logan and Brisbane’s southside encompassing multiple restaurants, two schools and a medical practice after two new COVID-19 cases were detected.

The front of the Woolworths in Spring Farm under a cloudy sky.
Woolworths says the move is due to an increase in coronavirus cases.(ABC News: Kevin Diallo)

The statement said face coverings would be provided for staff to wear for the foreseeable future.

Masks have been shown to offer protection against both getting and spreading the virus.

The Woolworths statement said face coverings would be mandatory in all Victorian stores from Sunday, in line with the Victorian Government’s announcement for compulsory use across the state.



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Major Melbourne retailers to bar people not wearing masks from entering stores


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Similar rules will be in place for electronics and furniture chain Harvey Norman, however, a spokesperson said the policy would extend to customers and staff in all of the company’s Victorian stores.

Exceptions will be made for shoppers with medical issues or children under 12.

However, shoppers will still be able to shop at Woolworths without a mask, with a spokesperson confirming the business would not refuse service to non-mask wearers due to there being a “range of personal circumstances where masks aren’t recommended”.

Coles did not specify if customers would have to wear masks, saying it would take the advice of the state government. Both Coles and Woolworths employees will be required to wear a mask from Thursday onwards, the supermarkets said.

Major retailers have said they will also supply employees with face masks to wear while working, a move welcomed by Australia’s largest retail union, the Shop, Distributive and Allied Employees Association (SDA).

“Consistent with current health advice, the SDA encourages staff to wear a face mask which should be provided by the employer,” a spokesperson said.

The union has also called on employers to have processes in place to allow staff to change face masks during shifts and to safely dispose of potentially contaminated masks.

Paul Zahra, the head of the Australian Retailers Association (ARA), also encouraged retailers to provide staff with masks and make sure they wear them during shifts. The ARA has also said that service should be denied for customers who do not wear a mask.

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“Retailers should be enforcing the law and that means that staff can only work if they’re wearing a mask and customers can shop if they’re wearing masks,” he said.

However, both the SDA and ARA said they have raised concerns with retailers over any potential backlash from customers regarding masks, with the union currently consulting with employers over their plans if staff face threats or “acts of violence” over incidents involving masks.

Josh Cullinan, the national secretary for the Retail and Fast Food Workers Union (RAFFWU), said it should not be incumbent on employees to enforce mask policies, calling on employers to implement in-store security or to leave enforcement to management.

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“That responsibility falls fairly and squarely on the employer, not to staff,” he said. “Security and police should be provided, if need be, to make sure the safety of workers is protected.”

Mr Zahra said retailers should call centre security or police if any violent behaviour occurs.

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What Starbucks learned about COVID-19 from its China stores


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To Starbucks CEO Kevin Johnson, there’s no question that COVID-19 will change humanity. “I do believe that this global pandemic will reshape the way we think about and live the rest of our lives,” he said. 

The virus has already changed the way the company runs its stores. The global retail giant is in what Johnson called a “monitor and adapt phase,” following a playbook that will likely guide the company for the next 18 to 24 months while the world waits for a widely available vaccine, or multiple vaccines, he said.  

“Until there’s a vaccine,” Johnson said, “everyone around the world is going to be aware that we have to live in a world with COVID-19.” Johnson made his comments Thursday as part of the National Retail Federation’s virtual leadership series. 

Through its operation in China, Starbucks had an early look at how the virus might impact the world. Johnson said he started to get involved with the leadership team in China’s COVID-19 response in mid-January, and it was quickly “evident [that the virus] would be something that would impact all markets around the world.” As the virus moved to other parts of the globe, the company adapted the safety protocols it had created for China for various regions.

Johnson said that even though the pandemic is ongoing, the company is no longer in crisis mode because it has figured out how to operate in this new environment. “We’re in a position now where we accept that is the new reality until there’s a vaccine,” he said. “This is the new environment that all retailers have to operate under.” Johnson said this moment is a chance to build a sense of trust with customers; if they believe retailers are creating safe environments for them, that trust will continue beyond the pandemic, he added.

Starbucks has provided all of its store employees with facial coverings, installed plexiglass at the point of sale, and instituted employee hand-washing on a 30-minute basis. The protocols, he said, were grounded in its work of understanding the science behind the spread of COVID-19. “If we don’t provide a safe environment, we and the economy can’t expect to reopen.” 

Starbucks was one of the first retailers to say that it would require customers wear face coverings in its stores, a mandate that went into effect yesterday.

Johnson noted that while the average amount spent per transaction had increased during the pandemic, the product mix was essentially unchanged. Trends that had already emerging were continuing: cold beverages outselling hot drinks and the move toward plant-based beverages and food. Earlier this summer, Starbucks started offering breakfast sandwiches made with Impossible Foods’ plant-based sausage patty.

However, the pandemic does have the potential to remake the company’s store footprint. With a significant amount of commercial real estate likely available in urban areas—at what Starbucks believes will be a lower rate—the company is going to “take this opportunity to transform its store portfolio,” Johnson said. Starbucks is planning on opening up more rapid pick-up stores in urban areas–what are essentially the pedestrian equivalent of a drive-thru. 

“The concept of experiences that are safe, familiar and convenient,” Johnson said, “that’s going to be the theme until vaccine or multiple vaccines are available.” 

More must-read retail coverage from Fortune:



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Bunnings and Officeworks could downsize stores after pandemic


Bunnings and Officeworks could ditch warehouse outlets and shift to smaller city stores in the aftermath of COVID-19, commercial property agents predict.

CBRE retail services director Zelman Ainsworth said businesses were looking for “less bricks and mortar” to reduce operating costs in the future.

He said retailers would not go “back to an inefficient way of working”, which would change the commercial market landscape.

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Bunnings could downsize in the future, commercial agents predict.


“Larger retailers in the inner city are looking for smaller format metro stores … places like Bunnings, Woolworths, Coles and Officeworks,” Mr Ainsworth said.

“There’s a real push from tenants to lease spaces which already have existing fit-outs, so there’s less costs involved.”

A Bunnings spokeswoman told the Sunday Herald Sun there were no plans to relocate any stores or open up boutique shopping outlets.

But the hardware retailer does have plans to be part of an upcoming luxury Mercure hotel in Doncaster.

Artist’s impression of the Mercure Hotel and Bunnings Warehouse development in Doncaster. Picture: Supplied.


“We are always looking at opportunities to innovate the design of our stores and we have a number of different formats that cater for the local markets where we operate,” Bunnings’ acting general manager of property Garry James previously told Leader.

Full Circle Property Buyers director Rob German said customers of all ages would opt to shop online even after the pandemic, which would encourage businesses to downsize shop space.

He said there would be a shift of retailers moving to smaller shops in the same suburb they already operate.

Melbourne’s commercial real estate market is set to change dramatically. Picture: Michael Dodge


But there would still be a place for warehouses and factory spaces in the future.

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“Factories and warehouses are becoming popular again, as they’re places that online shops can hold their stock,” Mr German said.

“People also want to buy more Australian-made products, which could help manufacturers and add demand to warehouses too.”

9 Biddy Court, Moorabbin was leased by an online produce supplier.


Home produce company Urban Farm is one business capitalising on consumer behaviour changes.

They recently leased a Moorabbin warehouse to store their fruits and vegetables, after recording some of the largest sales growth in Australia via their online platform.

The property at 9 Biddy Court will stock some of the company’s hardier produce like potatoes, carrots and onions.

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Why the Kohl’s CEO believes stores will still matter post-COVID


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The first quarter bloodbath could have been much worse for Kohl’s.

The department store chain on Tuesday reported comparable sales fell 43.5% in the three months ending May 2, largely because the pandemic idled all of its 1,100 stores for half the quarter. Picking up much of the slack was Kohl’s large e-commerce business and its ability to offer curbside pickup of online orders, something it had only been testing at a few stores pre-COVID-19.

“All this accelerated what would have taken years to happen,” Kohl’s chief executive Michelle Gass tells Fortune.

Last year, Kohl’s $4.5 billion e-commerce business represented 24% of sales. For the first quarter, digital sales were 45% of sales. That will normalize as more stores open, though Gass thinks they’ll settle at a higher percentage than last year and continue to rise. Kohl’s started to reopen in early May, and by Monday, half of them were open.

But as a greater percentage of sales comes online, that begs the question for Kohl’s: Does this change the role of its stores?

Kohl’s had already been in the process of shrinking hundreds of stores across the country—but not closing them—using stores as a distribution hub for e-commerce and a place to showcase products and stay top-of-mind for consumers.

“In places where we have a strong store base, digital sales are higher because the customer has that brand connection,” says Gass.

While the retailer has had a tough time of it in the last decade, with net annual sales stuck around the $19 billion mark without budging much, Kohl’s has fared better than Macy’s or bankrupt Sears and J.C. Penney, thanks to being an off-mall retailer with tidier stores and its racetrack layout.

Kohl’s has helped itself by focusing on keeping stores clutter free with tons of room for social distancing, something analysts say will be crucial for shoppers as stores reopen. The company has already removed racks to hold small impulse items that clogged up aisles. Gass says even smaller stores, typically 35,000 square feet versus 80,000 square feet, are also spacious enough for social distancing.

Stores are still crucial to showcase new brands and initiatives, too. Kohl’s will have mini-shops for Lands’ End later this year, though it is dropping its Jennifer Lopez collection after 10 years.

Another way stores are critical: saving a retailer on ton on e-commerce sales. Kohl’s gross margin on merchandise fell a staggering 19.5 percentage points to 17.3% of sales, largely because of markdowns to clear inventory. But 2.5 points of that was e-commerce. Using stores as pickup spots for orders is key to making the economics of digital sales work for brick-and-mortar stores.

Kohl’s quarter could have been much worse, given its emphasis on apparel. The Department of Commerce said last week apparel sales had fallen 89% in April compared to February. But Kohl’s has pushed hard into activewear in the last few years, with its own yoga lines and bringing in Under Armour, blunting the blow.

Gass thinks Kohl’s will pick up market share from J.C. Penney, which told a federal bankruptcy court this week it planned to close 242 stores.

As for its own stores, Kohl’s has never closed many stores, and Gass believes physical retail will remain central to the chain’s business, even once the pandemic has past.

“As we sit here today, we are still really committed to your stores,” she says. “There is going to be role for brick-and-mortar retail but it’s going to look different.”

More must-read retail coverage from Fortune:



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J.C. Penney files for bankruptcy and plans to close a number of stores


J.C. Penney, an iconic retailer founded in 1902 in Wyoming, has filed for Chapter 11 bankruptcy protection, slammed by years of dwindling sales, a huge debt burden, and a pandemic that has closed stores for weeks.

The department store chain said on Friday it had landed $900 million in debtor-in-possession financing to ensure operations continue while it wields its way through bankruptcy. Penney said it would close an unspecified number of stores in its 850-store fleet—media reports have suggested that number is 200. Net losses for the company totaled $4.2 billion between 2011 and 2019.

The bankruptcy is a stunning fall from grace for a retailer that at one point was surpassed only by Sears in size and importance in American life.

The filing was voluntary and supported by lenders holding approximately 70% of J.C. Penney’s first lien debt. The bankruptcy will erase several billion dollars of Penney’s indebtedness and help it navigate the enormous hit to sales stemming from the COVID-19 pandemic. Penney’s long term debt stood at $3.6 billion as of the end of February. The case will be overseen by federal bankruptcy court in Corpus Christi, Texas.

While the company has been struggling for years—net sales in 2019 were $10.7 billion, down from $19.9 billion in 2007—and has failed to reinvent itself enough to keep shoppers despite many turnaround attempts in the last decade, chief executive Jill Soltau suggested the COVID-19 outbreak pushed it over the edge.

“The closure of our stores due to the pandemic necessitated a more fulsome review to include the elimination of outstanding debt,” said she said in a statement.

Though a few stores have reopened, with many offering curbside pickup for online deliveries, Penney’s business is still taking a big hit. Apparel and home goods, its two biggest categories, saw the biggest pullback in U.S. retail sales last month. In a sign of how hard the quarter has been, department store Dillard’s said this week its gross profit margin on merchandise had fallen by two thirds to 12.5%.

The Penney bankruptcy is the third high profile Chapter 11 filing in two weeks, following Neiman Marcus and J.Crew. Sears, its longtime rival, filed for Chapter 11 in late 2018, but its business has continued to shrivel, dampening hopes for Penney’s prospects. Green Street Advisors, a real estate research firm, said last week in a note that it expected Penney to eventually liquidate because of a business that has been adrift for years.

Penney said in its release that as part of the deal for the bankruptcy, it would explore a number of options including selling the company.

For now, as detailed in a Fortune analysis on Friday, Penney will have to figure out how to finally reconnect with customers that have long since defected to the likes of Target, T.J. Maxx, Ulta Beauty, and even Macy’s, its bigger and financially stronger though injured rival, at a time shoppers are dealing with a tough economy and are limited in ability to shop.

More must-read retail coverage from Fortune:



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Apple to start reopening some U.S. stores next week


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JB Hi-Fi Employees Want Stores To Close


Phillip Hall was trying to keep a good distance from a customer at the JB Hi-Fi store he works at, when the customer told him the coronavirus wasn’t real.

“I was backing away from him, and he was like, ‘it’s not even real, you know’,” Hall told BuzzFeed News.

Throughout the (very real) coronavirus pandemic, which has closed Australia’s bars, restaurants, playgrounds and gyms, entertainment chain JB Hi-Fi has continued to open its doors.

But almost 1,000 of its workers, including Hall, have signed a petition calling for stores to close while the pandemic continues and for employees to be put on paid leave. They say they don’t feel safe working in JB Hi-Fi’s stores.

The popular electronics retailer now also faces a potential investigation into safety precautions at its stores over its handling of the coronavirus risk.

NSW Greens MP David Shoebridge wrote last week to state workplace watchdog SafeWork NSW requesting an urgent investigation into working conditions at the store.

Shoebridge outlined complaints his office has received from workers, including allegations of the provision of ineffective cleaning products and hand sanitiser, and a lack of social distancing inside stores.

SafeWork NSW told BuzzFeed News that it was investigating the issues and could not comment further.

In an escalation, the Retail and Fast Food Workers Union (RAFFWU), which is facilitating the petition, is also now calling on customers to avoid JB Hi-Fi stores and shop online instead. (A rival union, the Shop, Distributive and Allied Employees Association, wants retail stores to remain open.)

Hall has worked in the music and movies section of JB Hi-Fi’s World Square store in Sydney since late 2017, recently switching from full-time to casual so he could start studying.

When the crisis began to escalate in Australia in March, he assumed it was inevitable that all JB Hi-Fi stores would close.

“People would normally be flicking through [movies and CDs] constantly, sometimes they’ll touch every single rack,” he said. “And you’ve got all the display computers and iPads and things, so it’s a very interactive space.”



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