Asocial resellers will dominate the post-Coronavirus world

<p>For the past four decades, retail has been a battle between two ideas. Social retail saw purchases as entertainment. Asocial retail saw it as a chore.

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Now social retailers like Macy’s (NYSE: M), Nordstrom (NYSE: JWN) and even Kohl’s (NYSE: KSS) have to close their doors to coronavirus from China. They are not necessary.

At the same time, antisocial retailers like Walmart (NYSE: WMT), Target (NYSE: TGT) and Costco Wholesale (NASDAQ: COST) are hiring like crazy.

The result is permanent changes in how cities and suburbs are organized. Social retailers in large shopping centers, which have already been weakened by competition, lack the financial strength to continue to fight the double-income trends and time-limited shopping routines. Will antisocial retailers fill the gap when the crisis is over?

Investment trend in retail

In today’s extreme circumstances, hotel companies such as Hilton Worldwide Holdings (NYSE: HLT), Marriott International (NYSE: MAR) and Host Hotels & Resorts (NYSE: HST) are laying off employees. Such are food chains such as Darden Restaurants (NYSE: DRI), Brinker International (NYSE: EAT) and Cheesecake Factory (NASDAQ: CAKE).

Some help workers find temporary jobs on Amazon (NASDAQ: AMZN), CVS Health (NYSE: CVS) and Kroger (NYSE: KR), all of which employ tens of thousands of people.

As a result of the coronavirus, “Consumer spending will decrease”, wrote Dr. Zachary Cohle, an assistant professor of economics at Quinnipiac University. “This was true before the blockades began due to disruptions in the supply chains in East Asia. Groceries, medicines and important product markets will see sales increases; But small businesses that require open doors to generate revenue will incur losses. ”

Some of what happens is short term. Companies such as Domino’s Pizza (NYSE: DPZ), Papa John’s (NASDAQ: PZZA) and Chipotle Mexican Grill (NYSE: CMG), which staff for withdrawal and delivery, are unlikely to remain the only place to eat forever.

You can only eat so many burgers from McDonald’s (NYSE: MCD) and Wendy’s (NYSE: WEN). There will come a day when you sit in a Starbucks (NASDAQ: SBUX) again.

When the crisis is over, people will fly again, go to hotels, even take vacations. But when it comes to retail, this could be the death of the malls. Companies like JC Penney (NYSE: JCP) and Dillard’s (NYSE: DDS), which have already been weakened by the latest generation trend, may not survive. This will put pressure on mall owners such as Simon Property (NYSE: SPG) and National Retail Properties (NYSE: NNN).

Temporary or permanent

However, some of what happens will follow. Dollar General (NYSE: DG), hiring like crazy right now, will remain strong after the virus has been forgotten.

There are also retailers that are fading from the general trend but are now considered essential when people stay at home. The Kroger stock has increased the year after being left in the dust.

Ingles Markets (NASDAQ: IMKTA) hires after years of decline. Blue Apron Holdings (NYSE: APRN), the company for meal equipment, also receives a bid after going under.

There are also stocks that are beeped in both directions by coronavirus. Uber (NYSE: UBER) was hammered when people stayed at home, but is now getting a bid due to Uber Eats delivery service.

Home improvement retailers such as Home Depot (NYSE: HD) and Lowe’s companies (NYSE: LOW) have been hammered when people went down. But when people can get out of the house, they can go for a housing improvement, which makes the current prices of these warehouses look dirty.

The points

It’s hard to believe that Macy’s and Walmart were at once direct competitors. Both sold clothes and general merchandise. Walmart was just a discounter until it went all-in on grocery stores with its “hypermarket” concept in the 1990s. It now has almost 25% of the food market. Target was born from a traditional shopping mall, the Dayton-Hudson chain.

Trends that have gone on for decades, however, have become sudden facts in life during this plague year. People need to decide what they need and let go of whatever they want. This creates what it looks like as permanent shifts in the retail landscape. It also creates some fashion flies that will fade.

Modern can be a trade. The trend is called an investment.

Dana Blankenhorn has been a finance and technology journalist since 1978. His latest book is Technology’s Big Bang: Yesterday, Today and Tomorrow with Moore’s Law, essays on technology available in the Amazon Kindle store. Follow him on Twitter at @danablankenhorn. At the time of writing, he owned shares in CVS and AMZN.