What 5 Global Brands Are Doing in Response to the Coronavirus
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What 5 Global Brands Are Doing in Response to the Coronavirus

What 5 Global Brands Are Doing in Response to the Coronavirus

As companies worldwide continue to grapple with coronavirus, here is what 5 global brands are doing to cope with and to mitigate the impact on customers, staff, suppliers, the bottom line.

Costa Coffee (March 18, 2020)

This 50-year-old U.K. brand (acquired by Coca-Cola in January 2019 for more than $5 billion), has 4,000 stores and 9,500 Costa Self-Serve Coffee Bars in 9 countries, the large majority in the U.K. Starting March 19, the company's actions included the following:

  • All stores will be cashless and only accept card payments.
  • All seating areas will be removed from use in stores to support government guidance on social distancing; however, toilets will continue to be open for customers.
  • All drinks will be served in takeaway cups and food in takeaway packaging.
  • All stores will temporarily remove newspapers.
  • All stores will also have a more limited food range.
  • All drive-thru lanes will remain open as usual for customers in vehicles.
  • Costa Express machines will continue to operate up and down the country as normal, and will maintain the highest standard of cleaning and hygiene.

Zabka Polska (March 17, 2020)

Owner of the largest chain of convenience stores in Central and Eastern Europe (more than 6,000 outlets run by more than 4,500 franchisees serving more than 2 million customers per day), Poland's Zabka Polska announced it will transfer more than €1 million to activities addressing the threat from coronavirus. "We appreciate the engagement of healthcare professionals, ministries, and the units they supervise. For this reason, we decided to financially support the institutions that play a strategic role in solving the problems that concern us all," said Tomasz Suchanski, president of Zabka Polska.

To prevent the virus from spreading, the company introduced a number of solutions for its franchisees, store staff, and employees in offices and logistics centers. The stores have shorter opening hours, franchisees have received disinfectants and gloves, and plexiglass dividers have been installed to separate cashiers from customers. Franchisees can also specify the number of shoppers who can be present in their stores at any given time. And the hygiene regime in logistics centers was increased.

Canadian Tire Corp. (March 18, 2020)

Canadian Tire Corp. (CTC), which operates more than 500 stores across Canada, announced that, in response to growing concerns surrounding Covid-19, it will reduce operating hours at Canadian Tire Retail stores and temporarily close its other retail stores, including Mark's/L'Équipeur, SportChek, Atmosphere, Party City, Pro Hockey Life, National Sports, and PartSource. The temporary closure will be in effect from March 19 until April 2, at which time operations will be reassessed. During this time, full- and part-time employees will be paid.

CTC's precautions for the safety and well-being of its employees and customers include enhanced cleaning of stores; encouraging strong hygiene practices among team members; and making hand sanitizers and wipes available at all workstations and gathering spots, such as lunchrooms and service waiting areas. To help protect and support elderly and more vulnerable customers, many dealers are offering reserved shopping hours or setting aside inventory for pick-up.

The Second Cup (March 17, 2020)

Canadian coffee brand The Second Cup announced the following measures in response to the coronavirus. Specifically, the company will:

  • Defer the collection from franchisees of accrued royalties and cooperative advertising fund contributions from Feb. 23 to March 21, 2020 (otherwise due on March 31, 2020), while the company continues to understand and assess the impact of the Covid-19 pandemic.
  • Support conversations on behalf of its franchisees with landlords and financial institutions to request deferrals of rent or loan repayments, as needed.
  • Work with its full network of suppliers to arrange deferred payment terms to provide franchisees with additional flexibility to manage cash and payroll.
  • Additionally, the company confirmed that its cafes across Canada will offer take-out, delivery, and drive-thru service only, effective immediately.

Marriott International (March 23, 2020)

"The travel industry is being impacted in unprecedented ways by Covid-19," said Arne M. Sorenson, president and CEO of Marriott International. "As the virus and efforts to contain it have spread around the world, demand at our hotels has dropped significantly.... The situation is changing by the day and there is still tremendous uncertainty... While we cannot predict today how long this crisis will last, we know that it will get behind us. And when it does abate, lodging demand will rebound. We are confident that our company has the expertise and the resources to weather this crisis."

Marriott's financial and operational mitigation plans include closing food and beverage outlets, reducing staff, and closing floors or even entire hotels. The company has also temporarily deferred most brand standards to help owners and franchisees. These include delaying renovations due in 2020 by one year, deferring required furniture, fixtures, and equipment funding, and suspending brand standard audits.

At the corporate level, steps include making significant cuts in senior executive salaries, requiring temporary leaves in North America, shortening work weeks around the world and canceling non-essential travel and spending. The company estimates that these cost-cutting measures will reduce 2020 corporate G&A by at least $140 million - a number is expected to grow as additional measures are implemented.

Marriott also has taken steps to reduce costs related to programs and services that hotels reimburse it for, such as marketing costs, to be more in line with the expected decline in funding given likely lower systemwide revenues. The company has also reviewed its investment spending plans and currently expects to eliminate or defer at least one-third of its previous forecast of spending $700 million to $800 million in 2020, generally proceeding with funding only when the company was previously obligated.

Published: March 25th, 2020

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