Who will benefit and who will lose from coronavirus? Epidemic’s impact on grocery retail channels

Wpis dostępny jest także w języku: polski

For two weeks now we have been bombarded with a steady stream of news about how the coronavirus outbreak is affecting grocery retail. Large-format stores are grappling with increased traffic and stockpiling, and deliveries from e-stores are taking much longer due to higher demand. On the other hand, borders have been closed and domestic flights suspended, minimising travel and movement, and all shops in malls except grocery stores have been told to shut down to keep traffic as low as possible. Amid all this, PMR has attempted to estimate the likely impact of the epidemic on the grocery retail market and its individual distribution channels.

E-commerce will gain. Will anyone else?

In a new report, “The impact of the coronavirus epidemic on the grocery market in Poland. Alternative scenarios and development forecasts for 2020,” we present forecasts of how the grocery market and its channels will fare in 2020, under three alternative scenarios: (1) the existing restrictions remain, with all grocery stores open and no cities cordoned-off; (2) an Italy-like scenario; (3) an extremely negative scenario. (For comparison purposes, we have also estimated the value that the grocery market and its channels would have reached in 2020 in a world without the coronavirus.) Interestingly, it is only under the most negative scenario that we expect the grocery market’s value to decline compared with 2019.

According to PMR predictions, if the current circumstances continue, the main gainers will be e-commerce and large-format, chiefly due to consumers stockpiling on necessities and cutting down on impulse purchases.

What if the situation gets worse?

If things get worse – e.g. if a “national quarantine” is declared similar to the one announced by the Czech Republic, with people permitted to leave home only to go to work or buy basic goods – then a sharp slowdown of the grocery retail market is to be expected, and there will be no gainers, although some channels will suffer less than others. Logistics will become critical, with the ability to keep stores adequately stocked with food becoming a key source of competitive advantage.

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