Yes consumers must choose between going through a post-coronavirus blockade on Saturday to buy new clothes or having dinner in a restaurant, they will choose to go shopping.
This is the conclusion of the latest S&P Global Market Intelligence survey, who interviewed 1,250 people between April 30 and May 18. The S&P noted that about half of the respondents reported having earned $ 120,000.
When the restrictions were relaxed, 44% of consumers said they planned to return to stores. But only 31% said they would have dinner. After three months, the dinner result increased to 40%.
The results are consistent with comments from TJX Cos.
TJX
+ 1.08%
, along with CEO Ernie Herrman, announced year-over-year sales increases at more than 1,100 stores that had reopened in the past week or more, during the call for overpriced profits from the retailer last month.
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There has been a change from the start of home stay orders, while buyers, who now they’re using e-commerce more than ever, hesitate to return to stores for fear of catching COVID-19.
the consumer spending fell 13.6% in April and there have been a number of renowned retail bankruptcies, including J.C. Penney Co Inc.
JCPNQ
-2.24%
, Pier 1 Imports Inc.
PIRRQ
+ 18.00%
and J. Crew.
Yet a survey by Wells Fargo analysts found that 5% to 10% of the request may disappear permanently, with the acceleration of the adoption of electronic commerce.
“Overall, we think it could take until early 2021 before the store’s volume reaches” new normal, “” analysts led by Ike Boruchow wrote in a report released on Monday. .
“[W]We note a significant drop in traffic of ~ 60% in Q2 (slightly better than the -63% involved in our first survey), and a drop of ~ 30% in Q3 (slightly better compared to our previous survey). For the holidays, we still see a 15% drop in traffic, before reaching the “new normal” of -10% in early 2021. “
Wells Fargo found that part of the optimism was linked to increased traffic and stimulus checks, which generated spending.
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However, these factors are temporary. JPMorgan analysts believe the United States will take a long time to recover from other countries due to factors such as a tighter blockade and full tracking system in China, and more stimulus policies ” proactive “in Europe.
Gap Inc. is one of the retailers who will benefit from the turmoil associated with the COVID-19 pandemic.
GPS,
+ 11.12%
, that JPMorgan has gone to neutral since the sale.
“The weakness of the top line of Gap and Banana Republic continues to put pressure on the P / L, but we believe that Old Navy benefits from a broader view of the disproportionate growth of” retail value “(it that is to say similar to the price and has seen market share gains in many categories (denim, dresses, assets, children / babies) with additional market shares at stake due to the recent bankruptcy of JCPenney and possible door closings ($ 11 billion in total sales volume), “analysts wrote.
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JPMorgan also believes that Gap will benefit from an ongoing interest in sports equipment, which is the main category of the company’s Athleta brand.
JPMorgan raised its price target to $ 11 from $ 7.
According to the S&P survey, what consumers are most excited about spending is professional services such as beauty salons and spas. Over half of the respondents (55%) said they were eager to repeat these experiences.
The SPDR S&P Retail ETF
XRT,
+ 0.73%
It has dropped 10.5% over the year to date, while the S&P 500 Index
SPX
+ 0.37%
down 5.4% and the Dow Jones Industrial Index
DJIA
+ 0.36%
it fell 10.7% during the period.