Even as the coronavirus pandemic has devastated much of the retail industry, some of the nation's largest chains are thriving as customers stock up on groceries, home appliances and other essentials at unprecedented rates.
Retail giants Walmart and Home Depot on Tuesday reported big boosts in quarterly sales, propped up by panic-buying as Americans hunkered down at home. Walmart said online sales surged 74%, lifting overall sales by nearly 9% from February to April. Meanwhile, Home Depot said its revenue rose 7%.
On the other side of the spectrum: Kohl's. The department store chain posted a 41% drop in revenue for the quarter, offering a stark reminder of how the pandemic is boosting some retailers while hastening the demise of others.
Consumer spending has dropped precipitously in the weeks since the pandemic took hold. U.S. retail sales fell a record 8.3% in March, then plunged 16.4% in April, according to Commerce Department data, as Americans stopped spending on clothing, furniture, housewares and other nonessentials.
Retailers temporarily closed more than 260,000 stores because of the coronavirus outbreak, all but bringing business to a halt for many companies that rely on in-store shoppers to drive the bulk of their sales. Four major retailers — J. Crew, Neiman Marcus, Stage Stores and J.C. Penney — have already filed for bankruptcy this month, and analysts say they expect others to follow as more companies run out of cash and the economy continues to sour.
Pier 1, which had filed for bankruptcy weeks before the shutdowns, announced Tuesday that it would cease operations altogether. It had planned to closed 450 of its 936 stores and shed 40% of its workforce and find a buyer, but the pandemic ended those hopes.
"It's a self-fulfilling prophecy: The bigger, stronger players are taking even more market share," said Mickey Chadha, senior credit officer at the rating agency Moody's. "And the companies that were weak to begin with, they are only going to become weaker."
But spending on groceries has continued to climb. Walmart, the country's largest grocer, said profits rose 4%, to $3.99 billion, during he first-quarter. Demand has been so brisk that it has hired more than 235,000 workers since mid-March, according to chief executive Doug McMillon. All 5,355 of the company's U.S. stores have remained open during the pandemic.
"More than ever, the news this quarter is our amazing associates," he said. "They are rising to the challenge to serve our customers and our communities."
But worker advocacy groups say the company's gains have come at the risk of employees' health. At least 22 Walmart employees have died from COVID-related complications since March, according to labor advocacy group United for Respect.
Walmart said it is providing masks and gloves to employees and has installed sneeze guards at it checkouts. It has also announced two rounds of bonuses — $150 for part-time workers, $300 for full-timers. It said it spent nearly $900 million on employee bonuses and other COVID-related costs.