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Placer Bytes: Burlington & Corona Big Box

by 
Ethan Chernofsky
 on 
March 17, 2020
Placer Bytes: Burlington & Corona Big Box

Big Box Retail Weathering the Storm

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.

Walmart, a company that has managed to outperform in a very difficult period, is among those whose full strength may be on display. In a period where so many retailers are concerned or actively struggling, Walmart is seeing steady ongoing visits. Looking at the period from February 2018 through February 2020, visits for Walmart in February 2020 were 8.0% below the monthly baseline, a significant jump compared to 2019 when visits were 12.9% below. 

And this trend is holding up in the face of Coronavirus concerns. Visits the last two days of February were 7.1% and 36.1% above the baseline for Friday, February 28th and Saturday, February 29th, 2020. This is aligned directly with equivalent numbers from 2019 when the same Friday and Saturday were 7.1% and 32.6% above the baseline for daily visits during the period.

Essentially, Walmart visitors are still going, even where a drop might have been expected and understood.

And the same seems to be holding true for a company that has not seen the same market support. Target visits in February 2020 were 7.3% below the monthly baseline for the period, significantly better than February 2019 when visits were 15.2% below. 

But here, the pace is showing major year over year increases. Visits to Target on the last Friday and Saturday of February were 8.2% and 61.5% above the daily baseline for the period. This shows a massive jump from the equivalent Friday and Saturday in 2019 when visits were 2.6% below the baseline and 42.2% above respectively.

The increase is an indication of Target’s continued climb into a unique retail stratosphere. The brand succeeds consistently, even in the face of difficult periods, because of a powerful customer relationship. 

Could the wider effect of the virus still damage Target or Walmart? Of course. But are both putting their strong brand affinity on display? Absolutely.

Burlington Chooses Offline Over Online

In their quarterly earnings call, Burlington CEO Michael O’Sullivan made a strong statement to the power of offline retail saying “in our business, which is a moderate off-price business, the nature of the treasure hunt and the average price point that we operate at mean that bricks-and-mortar stores have a significant competitive and economic advantage over e-commerce.”

The comment came after the bombshell that the brand would be dropping its eCommerce effort - one which drove only 0.5% of sales - to focus solely on offline retail. And while the decision goes directly against the common thinking, there is a lot of reason to be excited by it.

Burlington is seeing consistent year-over-year growth highlighted by February 2020 traffic that rose 8.3% above the baseline for the period between January 2017 and February 2020. This is markedly higher than February 2019 when visits that were 21.7% below the baseline. Looking at that same period, March and December of 2019 were the only months in the last year that didn’t outpace the same months in 2017 and 2018 in traffic. 

The key takeaway here is that this decision isn’t happening in a vacuum. Burlington is experiencing significant offline growth and they are doubling down on a channel that is clearly working. The decision to drop eCommerce doesn’t mean the brand will never do online again, it just likely indicates that when they do venture back, it will be centered around their strongest asset - their stores. 
Can Target and Walmart continue to show strength in the face of Coronavirus concerns? Could Burlington be signaling a new retail trend? Visit Placer.ai to find out.

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