While the government forced shutdowns in winter and this summer to contain coronavirus affected Brick-and-Mortar retailers’ sales, e-commerce giants and large retailers have gained in Q2 2020. Target Corporation (NYSE:TGT), Amazon, Walmart Inc have reported excellent profits during the lockdown in Q2 2020.
Lowe’s and Home Improvement fared better
As feared by several observers, the gap between haves and have-nots in the industry is widened during the COVID-19 pandemic. The stay at home orders forced the US people to depend on the online mode for their essentials and benefit large retailers like Amazon and Target. The essential services like Lowe’s and Home Improvement gained during the government imposed lockdown in the US.
Large specialty retailers witnesses a steep decline
Large specialty retailers such as Kohl’s suffered a steep drop in their sales because they do not offer groceries. The government declared such retailers as nonessential and forced them to close their shutters for a longer period. It resulted in large layoffs and closure of shops at struggling department stores such as Macy’s. Specialty retailers should prepare for even bigger shocks soon.
A retail analyst at Forrester Research, Sucharita Kodali, who analyzed the financial results, said 80% of the competition is wiped out from the market and offered windfall gains for Target, Walmart, and Amazon.
Online shopping results in 44.5% YoY growth
Several e-commerce retailers in the US are buoyed by a growth of 44.5% YoY in Q2 2020 compared to just 15.6% average increases in previous quarters. Even before the pandemic hits the US population, Amazon is a popular choice, and the surge of coronavirus crises further supported its rise.
Target and Walmart have also enjoyed similar successes because of their strong improvements in e-commerce operations. According to Walmart, its sales almost doubled in Q2 2020. Target reported a triple jump in its sales in Q2 2020. Companies like TJ Maxx failed bitterly because they could not invest heavily in e-commerce.
According to a recent survey, around 46 million households in the US have placed their orders online. Walmart, Amazon, and Target that offer in-store pickup, curbside pickup, and delivery at the doorstep have benefitted from the lockdown measures to a great extent. In H1 2020, Target reported a gain of $5 billion in its market share. It is also on the backdrop of government permitting Target and Walmart to remain open and sell essential goods and food.