COVID-19 Operational Impacts – Most Challenged Sectors & the (Few) Beneficiaries
Most Challenged Sectors
Our sample of Interviews, which span the global consumer sector, consistently highlight leisure subsectors – cruise lines, hotels, casinos, gyms, pubs and bars, travel retail and cinemas – as the most severely impacted through the onset of COVID-19. Most businesses across these categories are currently under full government-enforced lockdown in major economies. Even if they are not, they still face pressure due to consumer awareness of the importance of social distancing and changing attitudes towards travel. Although some revenues may have partially recovered as consumer markets reopen, most will be lost altogether during the shutdown, with limited ancillary revenue streams or channel alternatives.
Consumer industries with limited online exposure have been marginally less impacted, including luxury goods and dining/QSR, although for the latter, primarily where restaurant delivery is deemed economically viable or there is a drive-through option. Industries with more advanced online penetration and capabilities – including apparel, general merchandise and online gaming – seem to have fared relatively better, given their ability to partially absorb lost purchases from bricks-and-mortar stores. Online gaming has benefited from sports betting substitution.
Demand has surged across certain lines of the fragmented consumer staples universe, including hygiene goods and traditional centre aisle packaged goods, with the latter experiencing a renaissance in demand. Grocery retail – online and offline – is assessed as the best-placed consumer subsector. It is absorbing spend deflected away from the out-of-home channel and benefiting from consumer hoarding to a certain extent.
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