COVID-19 Changes the Retail Scene
The authors are analysts of Shinhan Investment Corp. They can be reached at jwsung79@shinhan.com. -- Ed.
1. Retail: Polarization, staples, untact
COVID-19 has changed the retail scene. We have witnessed growth in non-store retail sales and higher preference for stores in the vicinity and non-face-to-face consumption. While people are avoiding crowded places, purchase prices are on an uptrend amid polarization of consumption. We will need to look at different strategies for each business type in view of increased online consumption and polarization in offline retailing.
2. Food/beverage: Change in consumer staples
The food/beverage sector has been most affected by changing consumption patterns over the past three or four months, with more people working from home and spending time at home. People are opting for food deliveries, takeaways and home cooking, instead of dining out. HMR products are expected to continue expanding.
Even before COVID-19, the HMR market growth has been spurred by changes in the social structure and demography. The decline in the number of household members reduced the demand for home cooking while increasing that for HMR products. A market reshuffle is expected around one major player. HMR products are fast becoming a staple along with diversifying demand and market growth.