Special Report

Spotlight Report: COVID-19 – Implications for the Global Consumer Landscape

  • Multi Asset
  • Consumer
  • Global

The first section of this Sector Spotlight report – “COVID-19 Operational Impacts – Most Challenged Sectors & the (Few) Beneficiaries” – discusses the consumer sectors that have been most and least challenged by the coronavirus amid government containment measures. This section will also highlight shifting competitive dynamics in the sector where applicable. The report goes on to explore “Self Help & Damage Limitation”, in which we consider the key landlord-tenant discussion, labour flexibility and the likely postponement of CAPEX schedules as businesses look to preserve liquidity. We share various “Recovery Considerations” and themes that emerged across our Interviews, considering the likely restrictions businesses may have to comply with upon reopening and how consumer behaviour may respond, particularly with the likelihood of a global recession.

Key Insights

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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