A glance at the global retail industry amidst the coronavirus pandemic

When all other industries are facing tough trading conditions across the globe, the retail industry is one that is finding itself in the thick of activities. There was a time when the success of a retail company was gauged by the extent of footfalls on supermarket premises. However, as things have evolved, it is now adjudged by the number of visitors on their respective websites and the number of online transactions they can generate. In the times of the coronavirus outbreak, the transition of these supermarkets from their traditional store & footfall-based business model to a digital retailing business model has been much accentuated. The online ordering and delivery of merchandise at customers’ doorsteps has emerged as the most critical business service activity across the world which is not only keeping the population adequately provisioned but is also helping the retail industry fight the pandemic induced economic slowdown.

Today, we look at five of the biggest retailers in the world and see how they have been performing amidst the chaos and the challenges that are being faced by these companies while they work hard to fulfil all their customers’ requirements.

Walmart Inc – (NYSE:WMT) The American retail giant has been witnessing high volume sales during the past month. The company though has been working hard to keep all its stores well stocked up, but the crazy rush of people to buy as many provisions as possible has been depleting the inventories of the company at its physical stores. The company has even restricted its working hours in the United States from 7 am to 8.30 pm, as the stocks are flying off its shelves sooner than they are being replenished. While not detailing how much sales it has been generating through its online portal, the company is, however, requesting its customers to order provisions online to reduce the load on its physical stores and staff.

The shares of the company have been trading at $115.19 at the time it was last checked on 30th March 2020 which is a 5.12 per cent growth from its previous day close on the New York Stock Exchange.

Tesco Plc – (LON:TSCO) British retail giant Tesco has also been witnessing a rush of orders in the past few days as is being witnessed by the American retail giant Walmart. The situation, however, is a little different in the United Kingdom than in the United States. Here the government has directed a lockdown to be imposed in the country except for people going out to deliver essential services. This has meant that most of the staff at the supermarket stores cannot come to work, and the online medium is the only open channel through which sales can be generated. The company’s online portals have since been inundated with orders. The situation has become so overwhelming that the company had to restrict the number of items to be delivered per order to 80, to cater to a greater number of customers.

Since the lockdown was declared in the country, and the news of overflow of orders with Tesco came to light, the shares of the company have been performing well at the London stock exchange. In the past week, the shares of the company have witnessed a jump of 9.8 per cent and were trading at GBX 229.99 at the time it was last checked on 31^st March 2020.

Amazon.com Inc – (NASDAQ:AMZN) The American online retailing giant has also been witnessing massive orders for food items, medicines and related items which are most useful in a lockdown situation. The company has started to prioritize these essential commodities over the non-essential ones with more warehouse space being reserved for these goods. Given a large number of orders it is getting for these goods, its suppliers are also struggling to keep pace with the flow of orders. The company has on its part offered an olive branch to its vendors by allowing them staggered repayment and interest rate holidays for those who had received financing from the company to acquire inventory and extend production. Many of the vendors who have been selling goods through Amazon have been facing problems recently as the company has been refusing storage at its storage facilities as it prioritizes essential goods and hence had expressed concerns that they will not be able to repay their loans in time.

The stock has witnessed a jump of approximately 10% in the past seven days. The stock was trading at USD1,963.83, up 3.36 per cent from the previous day close at the time it was last checked on 30th March 2020.

eBay Inc – (NASDAQ:EBAY) eBay has also been witnessing similar rush for essential products on its portal. The lockdown conditions in many parts of the world have been favouring these online retailing companies who are witnessing a turnaround in their fortunes. The company has, however, been witnessing problems with many of its vendors who have not been able to meet the augmented demand for essential items amidst concerns that some of its vendors may be profiteering by taking advantage of this situation.

The shares of the company have done exceedingly well at the NASDAQ in the past week, gaining more than 14 per cent in value. When it was last checked at the close of market 30th March 2020, the shares of the company were trading at USD 31.19, which was a gain of 3.35 per cent over the previous day close.

Alibaba Group Holdings Ltd – (NYSE:BABA) The company saw massive revenues in China in the last two months as more citizens in the country preferred online mode of ordering merchandise than going out to purchase the same at physical stores. It is now being said that the country has been shifting towards a stay at home economy after the pandemic outbreak as more and more people still prefer to stay indoors even after the threat of the outbreak has abated to some extent in that country.

The ADR of the company has seen a good trading performance in the past five days of trading on the New York Stock Exchange. At the time it was last checked on 30^th March 2020 the shares of the company were trading at USD 191.27 up by 1.42 per cent against the previous day’s close.

Conclusion - This pandemic could be a wake-up call for the retail industry. Once this period of turmoil is over, we could very well see a transformative change take place in the way business is conducted in the industry. The event has also brought to light the importance of technology to deal with lockdown situations like this and how the economy can be run without physical marketplaces.