Crisis communication initiatives between South African retailers and their stakeholders during COVID-19

Research purpose: This paper explores how companies in the South African retail sector are reporting to their stakeholders across communication channels during the COVID-19 lockdown period with a focus on the financial implications the pandemic has had on the retail sector. The study examines how companies use different communication platforms to provide stakeholders with material information about how the effects of the pandemic on the retail sector are being managed and what communication platforms are available.

Motivation for the study: Recognising the topical nature of COVID-19, it is important to establish how companies are responding to this crisis and what communication channels are being used to disseminate information to stakeholders. This study provides an emerging COVID-19 communication matrix which can be used to assess a company’s response to the pandemic and communication strategies which are prevalent. This will allow companies to identify and use different strategies based on their governance and communication objectives. It will also provide a framework from which further research can be conducted on communication strategies and, ultimately, lead to the integrated report and disclosures pertaining to the impact of the pandemic.

Research design, approach and method: This paper utilises a mixed approach to explore how companies in the South African retail sector report to the stakeholders across primary and secondary channels of communication.

Main findings: Retailers which have suffered the greatest decline in market capitalisation over the lockdown period can employ three different reporting strategies. The first entails an adaptation and conformance strategy. The second strategy limits the extent of reporting targeted at financial capital providers on the primary platform in favour of disclosures targeted at the general body of stakeholders to maintain confidence. The third strategy is described as a wait-and-see approach. For companies which have suffered the lowest decline in market capitalisation, the objective is to keep a low profile.

Practical/managerial implications: The level of reporting across communication channels selected during a crisis will impact the company’s transparency and accountability to stakeholders and its ability to achieve the desired legitimacy outcome.

Contribution/value-add: Organisations can use the emerging COVID-19 communication matrix as a starting point to understand which communication strategies can be employed during a crisis.