Apple re-closes some stores, raising concerns

SAN RAMON (AP) – Apple’s Friday decision to close stores in four states with surging coronavirus cases highlights a question that other businesses may soon face: Stay open or prepare for more shutdowns?

Apple, like many other major United States (US) retailers, shut down all of its US locations in March. On Friday, it said it would shut 11 stores, six in Arizona, two in Florida, two in North Carolina and one in South Carolina, that it had reopened just a few weeks ago.

The move heightens concerns that the pandemic might keep the economy in the doldrums longer than expected. Those worries sent stocks on Wall Street lower. It’s not clear whether other retailers will follow en masse, although one analyst expects hard-hit stores to stay open unless forced to close by local authorities.

Many other businesses, including manufacturing, travel, dining, and entertainment, have been steadily reopening where they can while taking health precautions. But some have recently pulled back or paused their plans. The Cruise Lines International Association, for instance, announced on Friday that ships will not be sailing from US ports until at least September 15, extending a pause put in place because of the coronavirus pandemic.

The auto industry, meanwhile, has seen its efforts to restart production hampered in part by infected workers.

This file photo shows Apple employees working inside an Apple store in Miami. PHOTO: AP

Because US efforts to contain the pandemic haven’t been particularly successful, the situation “could ultimately lead to a need for more prolonged shut-downs” that would reduce consumer spending and cost jobs, said Eric Rosengren, President of the Federal Reserve Bank of Boston. In public remarks on Friday, Rosengren said he expected the economic rebound this year would be less than what was initially hoped for at the pandemic’s outset, and that the unemployment rate would remain in double-digits.

States such as Utah and Oregon are pausing the reopening of their economies amid a spike in cases, while others like Texas and Arizona have not changed their plans. Arizona this week did mandate that businesses implement social distancing, and Phoenix made masks mandatory in public.

Like many of the biggest players in the technology industry, Apple has been faring far better than most companies amid pandemic-induced recession. The store closures won’t put a significant dent in Apple’s sales, said Wedbush Securities Daniel Ives, but they are “a worrisome trend”.

The Cupertino, California, company has continued to sell iPhones and other products online, and other retailers can do so as well if they decide to close, said Craig Johnson, President of retail consultancy Customer Growth Partners.

“I don’t think this is going to be a giant stumbling block for Apple or anybody else. You can still get almost everything you need online somewhere,” he said.

Johnson noted that the country’s biggest retailers, Walmart and Target, did not shut down, and neither did appliance chains like Home Depot and Lowe’s.