Only Two Retailers Showed Growth in Q1
The growth numbers for most of the top 25 global retailers in the first quarter of 2020 looked bleak as the effects of COVID-19 are showing. Experts are expressing optimism moving forward.
The COVID-19 pandemic has caused havoc on most of the top 25 publicly traded global retailers, according to a study that United Kingdom-based GlobalData conducted.
“Generally, the impact has been catastrophic,” GlobalData’s Managing Director Neil Saunders tells GlobeSt.com. “As most of physical retail has closed across the world, retailers have seen sales fall at an unprecedented rate. This has left most unable to cover their basic operating cost leading to massive losses. Those with weak balance sheets or high debt loads are now in trouble.”
The company’s analysis for the first quarter for 2020 as compared to the last quarter of 2019 shows that 23 of the top 25 companies showed a decline. Those companies include E-commerce giant Alibaba, WalMart, Home Depot, Target and Costco.
The only two companies showing growth during that time, Saunders said, was Amazon and JD.com.
With regard to Amazon, Saunders said, demand for the company’s “businesses including E-commerce, cloud computing and online streaming expected to remain strong during the pandemic.”
Amazon’s share price, the company said, recovered by 15% during March 16-31 after a 22% fall during the period from Feb. 19 though March 15.
As it relates to the strength of JD.com, Saunders said, “The company extensively used drones and autonomous delivery robot to maintain a delivery schedule in coronavirus affected areas, including Wuhan, in China.”
Saunders said there is a reason to be optimistic looking ahead.
“The good news is that retail is starting to reopen in many economies and has been open for a while in China,” Saunders said. “The evidence is that consumers are shopping again….”
Saunders continued: “There is reason to be optimistic about the future compared to the recent past. U.S retail is now reopening and trade is building. Provided there is no second wave of the virus, we will see the recovery continue for the remainder of this year.”
Saunders cautioned, though, “On a pessimistic note, the recovery will be slow and sales won’t simply bounce back to where they were before the crisis started.”
Founder in 2016, GlobalData is a leading data and analytics company. It has about 4,000 clients worldwide, including 60% of the Fortune 100 companies.
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