Will GameStop lose more than it wins keeping stores open during the coronavirus outbreak?
GameStop is back in the headlines for pushing to keep its stores open as many others temporarily close their doors to try and slow the spread of the novel coronavirus across the U.S.
The struggling video game retailer sent a memo from its headquarters to stores instructing them to remain open in resistance to governmental directives that require non-essential retail businesses to close for a period of two weeks or more.
The internal GameStop memo obtained by a variety of media outlets reads, “Due to the products we carry that enable and enhance our customers’ experience in working from home, we believe GameStop is classified as essential retail and therefore is able to remain open during this time.”
The memo directs store personnel to provide headquarters contact information to law enforcement authorities who are not persuaded by GameStop’s argument.
In a clarification statement issued by GameStop after the initial memo became public, the retailer said, “While there are many businesses and organizations far more critical than ours, we believe we can have a positive impact during this very challenging time. The health and safety of our employees and customers is of utmost importance and we have and will continue to take extensive precautions consistent with CDC guidelines. We are complying with all state, county, city and local ordinances and we will continue to adjust to any future developments.”
Of course, many of GameStop’s own store-level employees do not agree with the chain’s assessment of the business’s worth to society or its concerns about their safety.
One employee, who said he/she has been with GameStop “almost a decade” told Kotaku that the retailer’s current actions are “indefensible.”
Vice reports that local stores have not been provided with cleaning supplies by GameStop and have been instructed to shop at local stores to get what they need.
- GameStop: We Can Stay Open During Lockdowns Because We’re ‘Essential Retail’ – Kotaku
- GameStop Instructs Employees to Ignore Law Enforcement And Not Shut Down – Vice
- GameStop says it’s ‘essential retail’ to fight forced closures [Updated] – Ars Technica
DISCUSSION QUESTIONS: Do you agree with GameStop’s self-assessment as to the “essential” nature of its business at this time? What do you expect the reaction to be for GameStop from employees and customers?
Shawn HarrisDirector of NA Sales, SmartSight | EMA
Shawn HarrisDirector of NA Sales, SmartSight | EMA
Shawn HarrisDirector of NA Sales, SmartSight | EMA
Shawn HarrisDirector of NA Sales, SmartSight | EMA
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23 Comments on "Will GameStop lose more than it wins keeping stores open during the coronavirus outbreak?"
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Founder, CEO & Author, HeadCount Corporation
GameStop is classified as “essential” retail – seriously? GameStop has been struggling for some time, and so I understand management’s desire to keep their operation going. I don’t envy the decisions any CEO of a major retail enterprise has to make, however, this was handled very poorly. I believe that customers and, even more importantly GameStop employees, will remember how the company handled this – not well.
Chief Executive Officer, The TSi Company
There are no words GameStop can write to make this action look justified. Even if they sincerely believe they are staying open for the good of the public, which I doubt, no one will believe them. Yes they will do some business because many people feel the coverage of the coronavirus has been blown out of proportion, but I think any sales they make will be outweighed by the tons of negative press and employees who will refuse to work. This will, in turn, do severe long-term harm. I have a feeling that GameStop will be open for now, but because of significant pressure both internally from employees and externally from the media, if these shutdowns remain in effect, GameStop will have a complete change of mind within two weeks if not sooner.
President/CEO, The Retail Doctor
I believe the word is tone-deaf. Not sure what is driving this but I would imagine governors in CA and NY will see things differently. Quickly.
Co-Founder and Executive Partner, VectorScient
GameStop is clutching at straws, and its actions are desperate. Foot traffic absolutely tanked everywhere except grocery stores. This moronic defiance is not even going to make a difference for their bottom line, while losing all the good will they had with their employees and customers.
Managing Director, GlobalData
For a retailer like GameStop to stay open and force staff to work at this time is disgraceful. For them to tell staff to break the law and ignore the police is beyond contempt. GameStop’s management should be held fully to account for this.
Director, Affiliated Foods, Inc.
I just don’t get how they are essential retail – it wasn’t the first place I thought of to go get wipes or bleach. Bottom line, they want to take advantage of people and kids staying home. Not a good look for them to put sales above the health and safety of their people and the public.
Founder, President, Bakertown Consulting
I have no words for this – it’s a terrible decision in my opinion. The thought of calling GameStop essential retail right now is insane. And I agree with others, they are going to be forced to close anyway – either through media shame or the government. Hopefully soon.
President, City Square Partners LLC
Have you been in a GameStop store? I don’t know how you can have social distancing in their small, strip mall store format. Bad decision on their part and there will be a backlash against them for trying to grandstand with this decision. Best Buy has just implemented a policy limiting the number of customers into a store at one time to keep customers apart from each other. Best Buy is running short on some items like computer cameras as more folks work remote. Too bad GameStop could not get more creative to provide service without cramming people into their stores.
Principal, KIZER & BENDER Speaking
“The health and safety of our employees and customers is of the utmost importance.” But employees — Get your own cleaning supplies for the store and yourselves. GameStop’s self-assessment as being to the “essential” nature of its business is insane! And this to me is throwing their employees under the bus. And this tops it: How can you say “The health and safety of our employees and customers is of the utmost importance?” Yeah, right!
Product Marketing Manager, CB4
GameStop should focus on enhancing their e-commerce presence to keep their employees and customers safe. This money grab is not a good look for them right now.
President, Sageberry Consulting/Senior Forbes Contributor
Increasingly, trust is the most important asset that doesn’t show on a company’s balance sheet. When any organization takes an absurd position–in this case GameStop’s assertion that what it sells is “essential”–and appears to value near-term transactions over long-term relationships (among customers, associates and the community), they are detracting mightily from their brand value.
It’s both morally reprehensible and strategically misguided.
Principal, KIZER & BENDER Speaking
GameStop stores remaining open is an insult to every other business following the rules to help flatten the curve. This decision won’t affect the execs in the corporate office who made it, but it sure puts the front line associates in harm’s way.
Director of NA Sales, SmartSight | EMA
“Essential,” no. I’m sure GameStop is considering closing their stores as an existential risk to their business, period.
Retail Thought Leader
Clearly, GameStop has determined they would be more profitable as a company with their stores open rather than closed during this crisis. The messaging and statements are PR and communication to rationalize their decision. There are better ways to manage their outbound messaging and more reasons to close than stay open. Customers have the choice and won’t care. Employees will be the ones affected most and would have an axe to grind. The issue will dissipate given the high turnover rates of employees for small format stores anyway. That said, it’s still not morally or ethically right to put people in harm’s way.
Retail Strategy - UST Global
I think they actually just took the last step to close … permanently.
Founder, CEO & Author, HeadCount Corporation
Thank you for sharing your important perspective from the frontline, and reminding us just how difficult and complex the decisions are that retailers are being forced to make on a daily/hourly basis during these extraordinary times.
CFO, Weisner Steel
I join Mark in thanking you, although I would point out the situation isn’t different than any other multi-state retailer.
And it would be helpful if the article made it clearer if the company is actually “breaking the law” — as one commenter put it — or simply trying to create a policy within it.
CFO, Weisner Steel
To be completely fair (or thorough), definitions can vary between jurisdictions and sometimes be bizarre (PA defines beer wholesalers as “life sustaining”). That having been said, my understanding of the nature of what they sell makes the claim a s…t…r…e…t…c…h. That they are asking employees to patronize other stores — and thus increase exposure — makes the situation even more problematic.
No different than regular citizens go to the store, the CDCs guidelines have been clear, you can still go out, just practice social distancing, they even gave restaurant guidelines for reduced capacity, operate at 50%, seat every other table in a checkerboard pattern, guests 6 feet apart. The provisions beyond that, shutting everything down is a local/state decision.
Managing Partner, Advanced Simulations
I get why they want to remain open. But I’m picturing the villagers carrying torches, rakes, and pitchforks heading there tonight.
President, b2b Solutions, LLC
No. It was a terrible decision that will haunt them with their employees and customers. That assumes that they survive which is doubtful.
Retail and Customer Experience Expert
Completely tone deaf. No, just no … that’s what the online channel is for.