Fascinating that the presumed beneficiary is actually struggling.
“if customer behaviour were to return to normal by August it is likely that the additional cost headwinds incurred in our retail operations would be largely offset by the benefits of food volume increases, twelve months’ business rates relief in the UK and prudent operations management.”
There are clearly huge operational challenges.
Interestingly – the initial spike in volume (pictured) was driven by 30% of customers buying 60% of the volume (slide 23). Certain items flew off the shelves (slide 24) – you can guess which.
General merchandise, clothing, and fuel have been hit hard (FT suggests the latter two by -70%).
Staff has seen a massive spike in absence and they have had to recruit 45,000 people since 20th of March.
Scaling online has proven very difficult.
Additionally Tesco Bank will swing from £193m profit to a loss this fiscal year (due to bad debts and fall in income).
On 11th of March Amazon put a halt to almost all of its spending on Google Ads.
“Amazon seems to have completely removed itself from the competition for essential goods, effectively leaving one million daily visits on the table for other competitors to take.”
Paid search traffic to the site fell 90% almost immediately costing 11.2m visits.
Ebay has capitalised to a certain extent on this by bidding on high volume keywords – you guessed it – “toilet paper”, “n95 mask” and “hand sanitizer”.
Interesting data from Foursquare regarding foot traffic (up to 27th March) in the US.
As expected Airports -66%, Hotels -61%, Bars -60%, Gyms -64%, Malls -61%, Clothing Stores -72%, Movie Theatres -75%, Restaurants -73%.
There are some interesting observations though.
Despite restaurant traffic being down 73%, fast food is only -17% – likely due to take away.
Interestingly after the initial stocking spike traffic to supply stores, grocery stores (pictured) and liquor stores is now well down from the peak (but still up overall).
Drug stores on the other hand are seeing a +28% and hardware stores continue to see strong traffic (+27%).
Gas station traffic initially ticked up but are now seeing -7-8% decline.
Outdoors is booming with visits to trails +34% and parks +10%.
