The slowdown in the US and global economies began months before Covid-19 showed up. Consumers were already starting to economize by flocking to discount stores, notes Jim Powell, editor of Global Changes & Opportunities Report.
I think the coronavirus scare will put a new consumer emphasis on saving money. Best of all, the trend is likely to greatly outlast the coronavirus scare.
Walmart (WMT) is already seeing so many new shoppers the company is looking for at least 150,000 new employees. That’s all the more significant since nearly all other businesses are laying people off.
Walmart operates 11,300 discount stores, supermarkets, supercenters, warehouse clubs, and home improvement stores in 27 countries. It also owns Sam’s Club. Walmart is also in the catbird’s seat with its fast-growing online sales. For all but perishable products, the company’s customers can buy nearly everything they need without leaving their homes.
Walmart is starting to give amazon.com some serious competition with the products it normally carries in its stores. The Covid-19 scare can only accelerate the company’s online growth. Lastly, Walmart’s new healthcare business should benefit from the Covid-19 epidemic.
I expect the company will greatly expand its healthcare operations over the next few years. Even during good economic times when WMT sells at a premium, long-term investors could count on making a profit. At today’s more attractive price, the returns should be especially sweet.
Dollar General (DG) needs little introduction due to my recent reviews of the company that highlighted its strengths.
The Covid-19 scare can only make Dollar General more appealing to consumers who are leery of spending time in giant stores.I continue to think DG’s greatest asset is its management team that is very responsive to their customer’s needs.
Fresh produce, some frozen foods, and other popular “mini-grocery” products have been introduced over the past two years — and are selling well. Management has also largely reduced DG’s dependence upon products from China. I think DG is in the best position of all the “dollar stores” to benefit from Covid-19 opportunities.
