Modelling Challenges Faced by the Retail Sector in the COVID-19 Outbreak

The COVID-19 pandemic has hit the Indian economy very severely, and most organizations face many challenges in coping with this situation. The retail industry has also been hit very severely due to the COVID-19 pandemic. The rise of the pandemic is having a negative effect on short- and medium-term retailers, and earnest procedures and strategies for retailers are required. Many countries announced a lockdown to break the chain of the virus, which resulted in the closure of retail stores; moreover, even after lockdowns were removed, customer footfall decreased. This research is conducted to study the challenges faced by retail sectors due to the COVID-19 pandemic. A literature review was performed from the available literature, and the following five challenges were identified for the research: lack of supply chain flexibility, lack of government support, shortage of workforce, lack of balance in supply and demand, and change in consumer behaviour. A questionnaire is developed for the research in the retail industry. Data were collected from the retail, floor, departmental, and store managers. The questionnaires were sent to 459 respondents, but only 303 returned usable questionnaires that were valid for analysis. For the data analysis, exploratory factor analysis and structural equation modelling (SEM) were performed. The model developed showed a good fit, and all the hypotheses considered in the research were accepted. The current research will also serve as a base for conducting future research using the SEM approach in several other segments and from other nations’ perspectives. This research can be further extended to other sectors where the pandemic has hit the hardest.