How the pandemic helped the retail industry

The pandemic was predicted to deliver a heavy blow to retailers, but instead, some are coming back healthier than before. 

Profits are exceeding 2019 numbers at large stores like Macy’s and Ralph Lauren, and many chains restructured through bankruptcy or were able to get rid of money-losing locations, The Wall Street Journal reports.

Supply chain problems have been an issue for these stores, but they actually helped some retailers break the cycle of overbuying and discounting that has led to profit losses for decades.

In the past, many stores chose to overbuy instead of risking not having enough goods. The pandemic meant that every store faced a shortage, making a reset possible. 

The newfound pricing power is helping large stores offset other prevalent issues, like rising labor and shipping costs, executives say. 

Retailers have long had an oversaturation of stores and discounts. Pre-pandemic and pandemic closures meant more of a focus on profitability instead of growth for growth’s sake. Pre-pandemic bankruptcies also meant many stores took time to restructure their balance sheets. Now, the question remains as to whether stores can remain this disciplined and balanced even as demand increases again and supply chain woes ease. Read the full story.