Consumer trends in time of Covid-19
BOOST: BREAKFAST CEREAL, KETCHUP, PAPER TOWELS
Face masks and hand sanitiser may be the signature items of the Covid-19 economy, but the upheaval in consumer behaviour is boosting sales of cereal, tomato sauce and paper towels.
That is one clear conclusion from the latest round of earnings reports this week that underscored anew how the pandemic is scrambling economic activity as more people stay home, benefitting some companies, even as it thrashes airlines, hotels and many retailers.
“We remain highly relevant across the board,” said Procter & Gamble chief financial officer Jon Moeller, who thinks the shift in demand that boosted sales of the consumer product giant’s soap and cleaning products could prove lasting.
Cereal giant Kellogg is another beneficiary from the work-from home trend.
“We’re confident the at-home consumption is going to remain elevated,” said Kellogg chief executive Steven Cahillane, although he described trends as “choppy”.
“It’s an unknowable what happens with this virus,” Cahillane said. “You have the virus wreaking havoc in many states in the southern part of the United States.”
But not all upheaval has helped consumer goods producers.
Companies have been forced to spend more to employ social distancing in operations and provide employees with personal protective equipment. And there have been supply chain challenges, both to procure raw materials and to ramp up manufacturing to meet increased demand.
But the benefits generally have more than offset the costs for consumer goods companies.
McDonald’s, which is gradually adding dining room service at US restaurants, said breakfast was its weakest category.
Some analysts have also questioned whether Starbucks could suffer a lasting hit from the pandemic.
Meanwhile, sales to restaurants have fallen, along with those in vending machines and tied to travel.