US-based Target has provided an update on the impact of the Covid-19 outbreak on its business operations, reporting unusually strong traffic and sales, particularly in its stores and same-day services as shoppers look for essential and pantry stock-up items. For the month-to-date in March, overall comparable sales increased by over 20% year-on-year, with sales of essentials and food & beverage increasing by more than 50%, and sales of apparel & accessories contracting by more than 20%.
Target is among the first major retailers to report details on the severity of the demand shock that many retailers are facing now around the world. Retailer responses have been determined and radical, with Walmart planning to hire 150,000 workers and Amazon hiring 100,000 workers and fast-laning essential categories to respond to the unprecedented demand spike.
As the depth of the short-term shifts in consumer behavior become obvious, CPGs must work with their retailer partners now to identify essential items and best-suited distribution channels, and pivot production and logistics plans to serve these. Brands should also leverage real-time data to identify out-of-stocks and ensure fair distribution of scarce product among retailers, while ensuring transparency around delivery cycles to enable retailers to credibly communicate with shoppers on product availability at this time of insecurity.
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