There are few industries that have taken the same offline hit as the QSR sector. With many closing in-store dining options as early as mid-March, the wider industry saw a precipitous drop in visits shortly thereafter.
Author: Ethan Chernofsky
Following initial surges in traffic, the Wholesale and Mass Merchandise sectors saw visits decline to levels significantly lower than their norm. Yet, much of these drops have been self-imposed, with Costco, Walmart and Target all imposing restrictions on in-store traffic.
Coronavirus is continuing to make its impact felt across the United States. Yet, even with new peaks in cases, there is a strong hope that with effective social distancing in place, the virus’s impact could soon begin to dissipate.
There is a downside to stocking up for the long haul. Once you have all the things you need, there is little need for more visits. While some expected that the thrill of being able to get out could overcome a lowering demand for actual items, this may not be the case after all.
It is one thing to look at the impact of coronavirus on the wider U.S. economy, and another thing entirely to dive into areas that have been more directly affected. Severe impacts on a local level can be mitigated by wider strength when aggregating all locations of a chain across the country.
The coronavirus is having a huge impact on the wider retail economy, and it is likely that this effect will only grow in magnitude as CDC recommendations become stricter. However, there are sectors that are still performing well amidst the pandemic and there are critical takeaways. And these lessons don’t just apply in the face of a once-in-a-century virus, but also during more regular disruptions like inclement weather, economic downturns and more.
When discussing the impact of the Coronavirus on wider economic trends, the focus will likely center around hard-hit sectors like travel. But there are also areas of economic resilience, at least in the early days.
Imagine a place that has a near-constant flow of people during a period where there is national worry over a spreading virus. One would clearly expect visits to decline for such a location. Yet, the QSR sector, seemingly against all odds, doesn’t appear to have been heavily impacted by wider coronavirus concerns just yet.
In the midst of widespread closures, there are many brands that are still growing with companies like Nike and Lululemon. Yet, most of these names are not retailers on the rebound, but brands on the rise.
Two of the more exciting retailers have big earnings calls on the horizon, providing a unique opportunity to see if they’re 2019 end and early 2020 have lived up the hype. While these reports take into account a wide variety of factors, the early foot traffic returns look exceptionally promising.