Skeptical retail lobby wants data to justify Covid restrictions

California Retailers Association president says state hasn’t shown evidence industry “is truly a cause in the spread of coronavirus”

Los Angeles /
Nov.November 19, 2020 03:40 PM
California Retailers Association president Rachel Michelin (iStock)
California Retailers Association president Rachel Michelin (iStock)
 

California retailers are losing patience and money when it comes to the state’s seesawing Covid restrictions and closures. 

“We’ve asked the state for data,” California Retailers Association president Rachel Michelin said Thursday. “We really want to see the data if retail is truly a cause in the spread of coronavirus in California. But there’s no justification right now with data.”

Michelin warned many companies would “shut down or move out of California” in the first half of 2021 under the current state rules.

She spoke as California, like much of the U.S., reports a sharp rise in virus cases. On Monday, Gov. Gavin Newsom ordered that indoor retail locations across most counties be restricted to 25 percent capacity. On Thursday afternoon, he imposed a statewide 10 p.m. to 5 a.m. curfew for nonessential activities through Dec. 21.

While grocery stores and pharmacies are considered essential, much of the retail industry is not.

The retailers association has worked with the state and individual counties to accommodate Covid measures, but has also pushed back when it thinks those restrictions have gone too far.

While Michelin acknowledges the near doubling of daily California coronavirus positive cases compared to a month ago, she blames the rise on social gatherings, not people shopping at malls or walking in and out of stores.

Meanwhile, L.A. County public health commissioner Barbara Ferrer this week implored the county’s 10 million residents to “stay home as much as possible the next two to three weeks except for accessing essential services.”

In late September,  Michelin’s group supported a lawsuit by Unibail-Rodamco-Westfield that called on Los Angeles County to reopen indoor malls. The county did allow malls to open in October, with limited capacity. 

The retailer’s frustration comes as some of the bigger retail players were enjoying a modest rebound. 

Macerich, the Santa Monica-based mall owner, reported collecting 81 percent of rent across its portfolio in October compared to a low point of 26 percent in April.

Chain retail tenants paid 87 percent of their rent across the U.S. last month, according to a monthly report from Datex Property Solutions. That was a jump from 58 percent in April.

Still, Datex CEO Mark Sigal said the numbers “are pretty clear” that chains — from shoe stores to pet shops to movie theaters — are fragile enough that a temporary shutdown could trigger another drop in rent payments.

Retailers could benefit from a “consumer psyche” in which shoppers are no longer apprehensive about waiting in lines to enter stores, or wearing masks, he said. But he argued long-term restrictions or shutdowns at “inessential” businesses will cripple those shops absent more government stimulus.

“I personally think it is unconscionable that the government has not provided more assistance,” Sigal said. “If there were a tornado, you’d help the homes hit by the tornado.” 


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