COVID-19, otherwise known as the Coronavirus, is taking the world by storm. The ruthless epidemic is taking no prisoners. Protecting yourself from the virus might be a bit difficult as hand sanitizer is becoming a hot commodity. Fearful consumers are clearing out grocery and supermarket retailers of the bare essentials to prepare for the worst. But what does this mean for your business? Below we have summarized what’s been happening in the industries we serve since the virus has made its way to the US.
Coronavirus Effects on Your Industry:
Food/Beverage Industry
Pandemonium has set in, and industries are suffering – food and beverage taking the brunt of the whole fiasco. In result of the rapid expansion of COVID-19, consumers are staying in. Netflix streaming, family game nights and home-cooked meals are becoming the norm. Restaurant sales are declining, and industry leaders are concerned.
ABC News states, “The European alcohol drink-maker behind Guinness, Smirnoff, Johnnie Walker and more, reported extreme consumption drops. The company’s latest financial forecasts indicated that the lower consumption, as a result of the coronavirus, has caused “significant disruption” since the end of January and could take a $259 million loss in sales. The Food Institute reports that “animal protein dropped greatly in January and February, and demand will remain weak throughout the first half of 2020 if the virus is not under control until May-June.” They also noted “the impact could be more serious and longer-lasting if the virus isn’t contained within the first quarter. The losses from foodservice alone could total $8.8 billion to $13.6 billion.”
Business/Finance Industry
As the coronavirus persists, market anxiety increases. Coronavirus has caused an uproar in the financial world. The Dow Jones Industrial Average, has dropped over 1,000 points. Fortune.com reports that “The S&P 500 slumped more than 3%. Nasdaq slid 2.75%. The French CAC 40 fell 2%, Germany’s DAX lost 1.6% and the FTSE 100 in London dropped 1.8%.”
Corporations are losing millions of dollars, and weary stockholders are pulling out their money in fear of losing it all to the pandemic. Banks that have recently expanded into China are enforcing travel bans and asking employees to stay home.
Automotive/Freight Industry
The automotive industry is taking a massive beating due to many car brands being made in China. Fearful consumers are shying away from purchasing due to the outbreak. The Financial Times states that “the industry faces a “traumatic next few months” with consumers likely to delay car purchases.” They also concluded that the 40 Chinese cities that have reported double-digit confirmed cases of coronavirus account for 40% of China’s car market.
Tourism/Hospitality Industry
The coronavirus has impeded on the tourism and hospitality industry. Companies are playing it safe by canceling important conferences and meetings, leading to a decrease in travel. These losses could possibly extend to casinos, concert venues and sports arenas. TheHill.com featured a quote from economists at Japanese Bank Nomura, “Regardless of exactly how the outbreak manifests, we would expect the reduction in aggregate supply to correspond to less spending on recreational activities, shopping, eating at restaurants and other economic activity.”
Residential/Commercial Industry
The coronavirus has caused an unexpected turn in the real estate industry. Forbes.com says that the disease has “shocked interest rates to their lowest levels on record: the benchmark 10-year treasury traded below 0.70% today.” Along with the declining interest rates, the price of lumber and oil has decreased dramatically. Only time will tell if the Coronavirus brings about positive results for the real estate industry.
Healthcare Industry
As expected, Coronavirus has caused an increased demand for all things healthcare. Hospitals, pharmaceutical companies and home health care are facing impossible numbers. The biggest cause for concern will be a shortage of supplies including masks and medicine. Healthcare companies are expending all of their resources to accommodate the rapidly spreading disease.
Modernhealthcare.com states that “If the outbreak spreads significantly within China, it would dampen demand for U.S. healthcare companies that sell products there. Companies that use Chinese components, including pharmaceutical ingredients to make their products could also suffer supply chain disruptions.” Hospitals will take on high costs due to employees working overtime and patients’ late payments.
Education/Child Care Industry
Expect lots of school closures. School districts are expected to take precautions in preventing the spread of the Coronavirus. Millions of children will be elated to find that they get to stay home from school. ABC News reports, “Currently, school closures in over a dozen countries due to the COVID-19 outbreak, have disrupted the education of at least 290.5 million students worldwide, according to the United Nations Educational, Scientific and Cultural Organization.” School districts that stay closed for extended periods of time will be expected to employ some type of e-learning program to help keep kids on track. The biggest issue with e-learning is that not all children have access to technology.
Sports/Entertainment Industry
Expect disappointment and losses in the sports and entertainment industry. The March Madness tournament has been called into question and might not take place. With the tournament bringing in people from all over the world, the event is a surefire way to allow the disease to spread. Expect declining revenue in casinos, concerts and restaurants. Online gambling will soar. More people will be staying at home and making their own fun.
Retail Industry
Walmart and Target, who supply the essentials, don’t have to worry about declining sales, but they will have to worry about running out of product. Consumers are stockpiling the bare essentials and leaving the rest. Research has shown that since the Coronavirus became relevant, leisure shopping became a thing of the past. Consumers are not focused on buying for fun, they’re focused on buying out of necessity. Luxury brands will struggle to keep revenue on the up and up.
The Coronavirus has caused a worldwide panic, which has translated to chaos in the market, and declining sales. Is your business fighting off the effects of COVID-19? Burkhart has a cure! Now more than ever is the time to invest in marketing. Contact us for all of your marketing needs.
