Costco, hit especially hard by social-distancing rules, sees 90% bump in online sales
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Costco has been open throughout the COVID-19 pandemic, but it’s not what it used to be. There are social distancing lines out in front of stores, masks are mandatory and some merchandise is not available. This week, the retailer releases its first quarter results and outlines how it sees the road ahead.
You’d think people stocking up on household goods would be great for Costco. And it was, initially. But, in April, the company’s sales dropped for the first time since 2009.
Tim Campbell, director of retail insights at Kantar Consulting, said Costco has been hit harder than other retailers by social-distancing policies.
“If you just walk into a Costco, say, versus walking into a Sam’s Club on a normal day, pre-COVID, you would see that the Costco locations tend to be significantly busier,” Campbell said.
He said if Costco has to curb traffic, that might affect its revenue more than some other retailers. At the same time, Costco’s e-commerce sales rose 90% in April.
Phil Lempert, who runs Supermarket Guru said the temptation for Costco might be to ramp up its delivery options as more people shift to contactless shopping.
“But I think that their model is not going to be delivery. I think that their model is going to be where I go online, I can order my groceries and I pick them up,” Lempert said.
He said the company will have to invest in a more robust online interface if it wants to better compete with Amazon and even Walmart, though.
COVID-19 Economy FAQs
What’s the outlook for vaccine supply?
Chief executives of America’s COVID-19 vaccine makers promised in congressional testimony to deliver the doses promised to the U.S. government by summer. The projections of confidence come after months of supply chain challenges and companies falling short of year-end projections for 2020. What changed? In part, drugmakers that normally compete are now actually helping one another. This has helped solve several supply chain issues, but not all of them.
How has the pandemic changed scientific research?
Over the past year, while some scientists turned their attention to COVID-19 and creating vaccines to fight it, most others had to pause their research — and re-imagine how to do it. Social distancing, limited lab capacity — “It’s less fun, I have to say. Like, for me the big part of the science is discussing the science with other people, getting excited about projects,” said Isabella Rauch, an immunologist at Oregon Health & Science University in Portland. Funding is also a big question for many.
What happened to all of the hazard pay essential workers were getting at the beginning of the pandemic?
Almost a year ago, when the pandemic began, essential workers were hailed as heroes. Back then, many companies gave hazard pay, an extra $2 or so per hour, for coming in to work. That quietly went away for most of them last summer. Without federal action, it’s mostly been up to local governments to create programs and mandates. They’ve helped compensate front-line workers, but they haven’t been perfect. “The solutions are small. They’re piecemeal,” said Molly Kinder at the Brookings Institution’s Metropolitan Policy Program. “You’re seeing these innovative pop-ups because we have failed overall to do something systematically.”
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