The COVID-19 pandemic has forced nearly every industry to shift gears and bring new ideas to decades of old designs. This rampant innovation has created boundless opportunity, yet the pandemic and its effects are still evolving. When the pandemic initial hit nearly every business was focused on minimizing losses, however we have now transitioned to concentrate on recovery and rebuilding. Many of the companies looking at a rebuild are familiar with overcoming difficult financial hurdles having faced a recession a little more than a decade ago. The Great Recession occurred between 2007 and 2009, and like the pandemic we are facing now, both resulted in massive closures and substantial revenue loss. The recovery from these unprecedented closures could be swifter than anything we saw in 2010.

Lessons learned in 2020

One primary factor driving growth in 2021 is the investment in new technologies. The recession in 2007 caused many companies to be cautious about spending money, however the same has not been true of the COVID-19 pandemic. New tech like contactless payment and digital ordering were some of the only ways for restaurants and retailers to survive. Technologies like digital ordering were already being adopted prior to the pandemic and increased confidence that these measures were not short-lived solutions that would dissipate after the pandemic. Restaurants like Ark Restaurants Corp. and retailers like Ascena Retail Group Inc. both struggled during the Great Recession, yet were able to recover relatively quickly. Both companies have suffered some losses during the COVID-19 pandemic, though are similarly poised to recover.

The recovery from the recession was a long process, yet the nature of the pandemic means that some companies are bouncing back right now. Companies that are still struggling will see a boost as vaccine rollout continues and infection rates come down. Many businesses are ready to begin expansion again, however they should not rush out the door yet. Some opportunities could turn out to be “fool’s gold” and companies could find themselves in an unsustainable position in a few years. We saw this happen multiple times years after the recession and no more famously than Forever 21 Inc. The company aggressively expanded and agreed to leases that were cheap at the time due to mass closures. The returns for the company were very good for the first few years, although eventually the leases came up for renewal. The economy had recovered and Forever 21 could no longer afford all of the leases they had racked up. By spreading themselves too thin they were forced into the types of closures they had taken advantage of. This cautionary tale indicates that companies recovering from the pandemic should make sure to have proper demographic and competitive modeling at the forefront. CSG is the only provider to house more than a decade’s worth of openings, closures, geocoded locations, demographics, and other essential data for the retail & foodservice industries.

The recovery from the COVID-19 pandemic is moving ahead at full power. This is partially due to the speed with which companies responded and the innovative tools that have been adopted in every industry. The companies that have sustained throughout the pandemic have the chance to make a record recovery.