While there are many COVID-driven trends that will likely fade as the pandemic does, one that could have a significant long-term impact is the fundamental disruption to migration patterns. Already in the early stages of the recovery it was clear that something had shifted, with far reaching implications to retail, office, and residential real estate. So where do things stand today?
AMC’s stock began surging unexpectedly in mid May, as meme-driven retail investors bolstered a trading frenzy. But as AMC themselves admitted in their recent SEC filings: “We believe that recent volatility and our current market prices reflect market and trading dynamics unrelated to our underlying business.” So how is AMC really doing? We dove into the data to find out.
When the infamous ‘Chicken Wars’ first kicked off the summer of 2019, it laid the foundation for one of the most incredible stories of brand lift in the QSR space – catapulting Popeyes to newfound heights. But as interesting as the initial surge was, the subsequent October bump and the wider effect it had of driving more players into the Chicken Sandwich mix may have been even more meaningful. The result was a scenario that intertwined chicken and QSR success. So where do things stand at the moment? We dove into QSR’s chicken-sandwich leaders to find out.
If there’s one sector that saw a pandemic driven boost, it was the home improvement space. Home Depot saw a year-over-year visit increase of 13.1% between 2019 and 2020, while Lowe’s and Tractor Supply saw respective jumps of 21.3% and 18.5%. The success carried into 2021, with visit surges driving huge year-over-year growth in the first quarter. The rise of work from home, the added time at home during closures, and shifting migration patterns all contributed to the sector’s unique success.
The fuller period from Thursday May 27th though Monday May 31st saw several brands driving growth, with others experiencing limited relative declines. Target, Ulta, and Burlington continued their strong recovery with visits over the five day period up 6.6%, 15.0% and 8.3% respectively when compared to the equivalent five day Memorial Day weekend period in 2019.
As one of the strongest performing retail sectors during the pandemic, the grocery sector showed exceptional offline strength by quickly adapting to a new pandemic-influenced reality. Yet, nearly halfway through 2021, it is increasingly clear the return to normalcy is in full swing, and with that, the need to adapt to a changing environment once again. To leverage last year’s surge and position themselves up for longer-term growth, grocers must understand which trends are here to stay and which are not.
In this Placer Bytes, we dive into the recovery of Disney World and convenience stores to see if dropping COVID rates and returning routines drove a needed boost. When we last looked at Disney World, a compelling recovery story was beginning to unfold. While the recovery had been happening, albeit slowly, since the reopening of the park last summer, the spring gave visits a needed boost. Visits were down just 48.6% in March when compared to the equivalent month in 2019, but in April that gap had dropped significantly to just 32.4%.
While we knew the wider coffee sector was trending in the right direction, the latest numbers from top brands in the space only deepen the optimism. Additionally, the results also strengthen key findings from migration analysis data speaking to unique retail and hospitality opportunities in rising regions. Visits to top coffee and breakfast oriented chains have continued to improve in recent months when comparing visits to a ‘normal’ 2019.
Admittedly, the athleisure and athletic wear space was one where we expected to see a rapid and significant recovery. Yet, the magnitude and speed of the recovery deserve extra note because many of the brands that headline the sector are facing significant challenges that make the success all the more impressive. While sweatpants as work clothes may have picked up pace, the locations of many of these brands are mall or city based, making the wider recovery context more challenging. Yet, they recovered.
The home improvement sector was a clear retail winner throughout the pandemic, but by late 2020 home goods brands like At Home and Floor & Decor were seeing similarly impressive levels of strength. The sector surged by riding a similar wave as a homebound audience was pushed to look for ways to improve their increasingly central surroundings and greater migration drove a need for new furnishings. And like the home improvement sector, home furnishings leaders saw that strength continue into 2021.
In spite of pessimistic predictions made during the height of the pandemic, the fitness sector is experiencing an impressive offline recovery. And while the sector’s recovery pattern can undoubtedly be tied to an accelerated pandemic-influenced health trend, there is another significant contributor to its gradual growth in visits. Fitness brands are internalizing and quickly adapting to new challenges and shifts in consumer behavior patterns.
Considering the unique effects of COVID, QSR brands were among the best situated in all of offline retail, but especially the dining sector. A value orientation in a time of economic uncertainty provided a benefit that was bolstered by pre-existing strength in takeaway, drive-thru and delivery. The result was a strong ability to drive strength during the pandemic.
In the last year, the dollar store sector has clearly been among the better positioned segments within all of retail. And there is real reason to believe that this is just the beginning. Brands like Dollar General and Big Lots are poised for big things in the next year, and new concepts like Dollar General’s Popshelf could make the coming years even more exciting for an increasingly sophisticated sector.
In this Placer Bytes we dive into three leading beauty brands – Ulta, Sephora and Bath & Body Works.COVID-related restrictions certainly had a significant impact on visits to all three brands, yet they all have been in the midst of significant recoveries since the summer of 2020. In early 2021, Ulta saw the year-over-year visit gap drop to as low as 3.0% in January, with Sephora seeing a gap of just 27.3%. Bath & Body Works continued an impressive run with visits actually up 7.9% year over year in January.
While every sector has its doubters, off-price leaders were the focus of a high level of concern during COVID because of their reliance on physical locations. And while the ultimate success of the sector, especially relative to the wider apparel space, was hardly impossible to predict, the performances of top brands in the space were truly impressive. So where do things stand and how might these leaders progress deeper into 2021?
April marked an important month for retail recovery, but one sector that may be less thrilled to see the coming spring is home improvement. The brands in the space have seen incredible strength throughout the pandemic, with Q1 marking another strong quarter. Yet, unlike most sectors that will benefit from 2020 weakness to emphasize 2021 strength, home improvement leaders will be compared to their unique peak during the pandemic.
In the biggest shock of the retail year (note the heavy sarcasm) both Walmart and Target are recovering well. Looking at year-over-year numbers in March and April shows Target visits skyrocketing to gains of 21.7% and 49.5% respectively in the two months. Walmart went from significant year-over-year declines to a March visit gap of just 0.4% and visit growth of 21.7% in April.
The wholesale club sector experienced several fundamental disruptions during the pandemic that offered the potential to redefine the space. Brands like BJ’s Wholesale Club surged with 13.0% visit growth in 2020 compared to 2019, while Sam’s Club saw a 4.3% increase in visits year over year. And these jumps were given added weight as industry leader Costco, saw a near impossible to imagine 2.1% decline in visits in 2020.
Department stores faced a uniquely challenging environment in the last year with COVID limiting visits to malls, retail stores and more product brands looking to emphasize DTC channels. And while signs of a recovery are popping up for the sector, there are still fundamental questions about the true power of the model from a long term perspective.
When we covered Best Buy’s strong start to 2021, we noted that the brand was positioned exceptionally well for the recovery period. And while our overarching affection for the brand and its powerful strategic decisions are clear at this point, recent data only deepens our expectation for a very strong 2021.
