AUS
NZ
UK
CA
USA
FRA
GER
ESP
ITA
NLD
PRT
SWE
GRC
IND
POL
BRA
ZAF
RUS
CHN
UAE
Source: insta_photos, Shutterstock
Summary
- More and more people buying daily essentials directly from stores as restrictions ease
- Stocks of consumer staples and durables see impressive gains
- Trend likely to continue as the pandemic situation improves
With more Covid vaccines being rolled out and sustained progress in the handling of health emergencies is being made, the US consumer industry has reasons to smile.
Grocery, meat-and-dairy products, apparel, and even consumer durables, such as electronic items and auto, are daily essentials that everybody wants. It is no surprise that consumer companies have seen their stocks surge in the markets this January.
Positive Trends Lift Consumer Industry
As authorities relax some of the tougher measures for Covid, people can buy their daily needs directly from the stores. It also helped companies to restaff their home-delivery platforms.
Online shopping saw a significant boost as the home delivery services were fully restored. After almost a year in lockdown, people are raring to go out, shop and spend time on leisure activities.
These trends have had a significant impact on the consumer market, evidenced from the consumer stock performance across all indices.
Unless the Covid situation changes for the worse, this trend is likely to continue. And the demand for consumer staples and durables will continue to grow as the situation improves.
Resetting Industry Strategy
COVID-19 has presented new challenges and opportunities.
It has changed the way people interacted, and most importantly, their shopping habits, which may have replaced some old priority items on their grocery list with new ones.
And the companies are mindful of the changes and evolving to meet the growing needs, be it health, product awareness, or ease of shopping experience.
More and more companies are turning their attention to e-commerce or digital platforms as contactless and faceless transactions become a new normal in a Covid world.
According to some analysts, many firms on Wall Street are already investing big, as much as 80 percent of their resources, on e-commerce and direct-to-consumer (DTC) channels.
Consequently, technology upgrades and the efficiency of their operations would be the cornerstone of their success or failure going forward.
Many companies, such as Amazon, Walmart, and others, have begun using artificial intelligence and across-the-board automation processes to handle digital sales.
These changes are already having a profound impact on consumer markets across the globe.
Securing the Supply Chains
Building safe and reliable supply chains will be among the top priorities for the consumer sector companies, a prerequisite to remain competitive in markets. Supply disruptions were seen during the pandemic in different parts of the globe, and with that knowledge, companies are renewing their focus on supply-chain resilience. According to an estimate, some 10 percent of consumer giants would accelerate changes in their supply network.
Structural Changes
Besides reinforcing their operations, some heavyweights are also considering structural changes to remain competitive, irrespective of the external environment. The focus has been to cut expenses and move away from unsustainable assets through closing or selling facilities. It would help the companies to consolidate the profitable ventures and repurpose the resources for future growth.
Stocks that are Attracting Attention
Stocks of NYSE-listed companies, such as Campbell Soup Company, Albertsons Companies Inc., The Kroger Co., Constellation Brands Inc., Coty Inc., and Walmart Inc., have seen modest growth.
On NASDAQ, companies like Grocery Outlet Holding Corp., and 2U Inc. have recorded modest gains over the past few weeks. Consumer durable, and media and entertainment companies, such as AMC Entertainment Holdings Inc., Nokia, Blackberry, and auto stocks like Tesla, have seen handsome growth in share value.
Campbell stocks (NYSE:CPB) were trading at more than 5.5 percent at US$52.71, while Albertsons Companies stocks (NYSE:ACI) were up by 4.72 percent at US$20.42 on Thursday.
Likewise, Kroger Co (NYSE:KR) stocks were up 4.53 percent at US$38.75, Coty Inc. (NYSE:COTY) 1.33%, and Constellation Brands, Inc. Class A (NYSE:STZ) 2.97 percent.
Stocks of Grocery Outlet Holding Corp (NASDAQ:GO) were trading at US$46.12 per share, up by 8.29 percent. 2U Inc (NASDAQ:TWOU) was down by 5.89 percent but saw good gains in the recent past.
