Friday, July 31, 2020

E-commerce ‘saves’ department stores from total collapse

The stores joined in the ANTAD showed a drop of 72.7% in their sales to comparable stores during the month of April. The department stores joined in the National Association of Self-Service and Department Stores (“, ANTAD,”), presented a 72.7 percent contraction in their sales to comparable stores during the month of April due to the COVID-19 pandemic, although it strengthened your strategy in e-commerce sales. This is the worst indicator for the sector since December 2008, when in the midst of the financial crisis, departmental sales fell 22.2 percent annually. “, The,” pandemic brought with it a health emergency that from April 1 forced all non-essential activities to stop operations. In the case of department stores such as Liverpool, Suburbia, Sears, El Palacio de Hierro, among others, electronic commerce took on great importance.

“You have to take into account factors, people from the high socioeconomic level did not go on vacation, they took them at home, which we might think led them to make more purchases by e-commerce,” said Marcela Muñoz, deputy director of Vector analysis. The fact that the department stores did not show a 100 percent contraction in their sales during the month of April, is supported by the adoption of electronic commerce. The Port of Liverpool projected that in April they would have an 80 percent contraction in sales in Liverpool and 98 percent in Suburbia, while e-commerce stood out in the first quarter of the year 26.5 percent annually and represented 9.3 percent of the total of your sales. “It is difficult to know how much of the traffic is going to stay in ecommerce once the stores open, then it could represent 15%. In Suburbia ecommerce is still small. In the last days we saw 1.5 percent of the typical sales of Suburbia ”, mentioned Enrique Guijosa, finance director of El Puerto de Liverpool. Meanwhile, ANTAD’s specialty stores, which include home improvement, fashion, restaurants, pharmacies, and convenience sectors, reported a 17.5 percent annual drop to comparable stores in April, the worst indicator since record. “All non-essential stores, such as fashion and all restaurants, closed, which did not endorse Oxxo and pharmacies,” said Verónica Uribe, analyst at Monex.

Alsea, operator of Starbucks chains, Vips, Burger King, among others, reported that despite continuing to operate from the home service model, its sales in Mexico registered a 67 percent drop in sales. Meanwhile, Oxxo -of Femsa- presented an increase in sales to comparable stores, from those with more than a year in operation, of 5.5 percent from January to March, driven by a 9.1 percent rise in the ticket, which was it countered with a 3.3 percent drop in traffic. Meanwhile, Farmacias Benavides had sales of 3,721 million pesos in the first quarter, 5.7 percent more than the comparable period, with extraordinary sales during March due to panic purchases from customers. For their part, self-services such as Chedraui, HEB, La Comer, Soriana, among others, managed to report an 8.7 percent annual growth in sales to comparable stores, a slowdown from the 21.9 percent rise that occurred the previous month.

Source: El Financiero


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