“The haves are the stores that remain open with lines out the doors to buy daily necessities,” he noted, “while the have-nots are the stores that have closed and are taking the brunt of the impact of the pandemic. These numbers should come as no surprise given the mandated shutdown of our economy to slow the spread of the virus.”
The pain is expected to continue in April as stores remain closed in an effort to slow the spread of the virus; IDC estimates global retail 2020 growth forecasts will be halved from their pre-COVID-19 predictions.
“March was a month that started out with many stores still open, but far more are closed now,” noted Kleinhenz. “Don’t be surprised if the data going forward shows a worsening situation. Even if the economy begins to reopen in May, consumer behavior may take a long time to adjust. The road to recovery could be long and slow.”
Seeking Silver Linings
Despite this ominous landscape, select categories may still face opportunities to offset declines.
For example, consumers may seek to replicate their much-missed salon treatments at home, said data and analytics firm GlobalData, providing an opening for beauty retailers.
“Essential health and beauty items, such as paper products and bathroom toiletries, are being prioritized, with more frivolous purchases abandoned by many,” said Kate Ormrod, GlobalData lead retail analyst. “However, as the weeks go by and shoppers want to treat themselves and regain a sense of normality, we expect them to seek out at-home beauty and grooming alternatives now that their usual destinations for treatments are temporarily closed.”
Likewise, the rise of remote working has given some technology categories a shot in the arm, noted Stephen Baker, NPD vice president, industry advisor, technology and mobile.
“While this will likely begin to level off, the rush to equip our homes for distance connections (either for work or education) means that in the future consumers, as well as businesses, are likely to give a lot more thought,” he said, “and allocate a lot more in funds to the maintenance of a high-quality tech setup at home alongside wherever else they may need it.”