Ikea China closes all stores in wake of coronavirus

Swedish furniture and homewares chain Ikea has closed all of its mainland Chinese stores in the wake of the coronavirus outbreak.

The decision, announced Thursday, came just hours after the company said it would shutter half its 30-strong network in the country. 

Ikea China is the latest in a long line of international retail groups to announce a curtailment of activities in the country as the death toll and infections from the Wuhan-centred virus rose rapidly this week.

McDonald’s CEO Chris Kempczinski said the chain has closed “several hundred” stores in Hubei, but outlets in other parts of the country would remain open for now.

On Wednesday, Starbucks said more than 2000 stores would close indefinitely, including its flagship Shanghai Roastery, although delivery services would continue from some of those locations. KFC, Pizza Hut and Haidilao Hotpot were among other restaurant chains to close part of their network.

Tech giant Apple has closed three stores to date: Rainbow City in Nanjing, Tahoe Plaza in Fuzhou, and Vientiane City Qingdao. The company said it would reopen the stores by February 4, however this is likely to depend on further advice from government authorities. 

Uniqlo, the Japanese fast-fashion chain, has closed about 100 stores, mainly in Hubei province where Wuhan is situated, its remaining 650 stores in Mainland China continuing to trade at time of writing. Muji has closed about 10 stores in Wuhan’s inner city district. 

Some of the Wuhan stores have been closed because staff are unable to travel to work due to travel restrictions imposed by government authorities. 

Selected supermarkets are continuing to trade in affected areas of China to allow locals to purchase food and daily essentials, although some suppliers are encountering difficulty delivering products to retailers, due to traffic restrictions and a shortage of staff.  

Anne Ling, an equity analyst at Jeffries, says she expects food retailers will be relatively more resilient under the current situation. “Online delivery capability and strong fresh-produce capabilities are highlighted from this incident.”

By retail category, fresh produce like vegetables, meat and cleaning products are selling well, with strong double-digit increase while liquor and beverage sales have declined by double digits as sales are driven by gatherings and events. “Non-food products experienced a substantial decline.”

Ling anticipates landlords will offer tenants rental relief. “Hypermarket chains might also consider rental relief for tenants at their shopping areas.”

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