Ecommerce and Brick and Mortar Sales Booming During Panic
In the midst of uncertainty consumers are stock piling goods in greater quantities than usual. Grocery stores such as H-E-B, Kroger, and Target are one of many places that are witnessing an increase in sales due to the pandemic.
Despite the increase in consumption of goods, the market continues on downward rollercoaster ride. Stores are cutting hours because of how much and how quickly customers are buying out stock. Walmart is one of those stores to limit hours: “We have also authorized our store managers to manage their inventory, including the discretion to limit sales quantities on items that are in unusually high demand.”
Online sellers like Amazon.com have also witnessed a significant increase in sales. So much so, that Amazon executive Dave Clark stated, “We are opening 100,000 new full and part-time positions across the U.S. in our fulfillment centers and delivery network to meet the surge in demand from people relying on Amazon’s service during this stressful time, particularly those most vulnerable to being out in public.”
Investors should be prepared for a sudden boom after the next quarterly earnings reports. Walmart (NYSE: WMT) has been steady throughout, but companies like Amazon.com (NASDAQ: AMZN) and Target (NYSE: TGT) have fallen into more discounted territory.
If you are a defensive or dividend investor you will want to keep your eye on Procter & Gamble Co. (NYSE: PG). Cleaning supplies are in high demand at the moment. The CDC is setting higher guidelines for safety and hygiene:
“Household members should clean hands often, including immediately after removing gloves and after contact with an ill person, by washing hands with soap and water for 20 seconds. If soap and water are not available and hands are not visibly dirty, an alcohol-based hand sanitizer that contains at least 60% alcohol may be used. However, if hands are visibly dirty, always wash hands with soap and water.”
Already hand sanitizer and products such as toilet paper are in high demand. You would be wise to secure P&G’s 2.55% dividend before the market starts to rebound.
Though politicians and healthcare professionals are in agreement of the short term downturn, consumers are preparing the market for an even greater rebound in the long term.