When it comes to the COVID-19 crisis, there are two kinds of companies: Those that benefited from it and have to worry how they will do as the crisis eases, and those that got hurt by it and have to worry if they will ever get their old business back.
The novel coronavirus pandemic led to a reworking of the economy unlike any other since World War II. In the 12 months ending in the first quarter, Commerce Department figures show that consumer spending on liquor rose 16%, while spending on taxis and ride-sharing services fell by 52%. In April, there were nearly a million more people working in warehouses than before the pandemic, The Wall Street Journal reports.
The massive economic shifts have made for a mix of winners and losers that often cuts against the narratives in place before the pandemic took hold. Remember how millennials weren’t going to buy homes? Now home sales are at their highest levels since the housing bust. Remember how today’s consumers valued experiences over things? Spending on recreational goods and vehicles, such as televisions and boats was up 14% in the first quarter from a year earlier.
The big question is to what degree are these shifts permanent. Complicating this answer is that as the crisis subsides people could embrace some of the things they have been missing out on, like going to restaurants and ballgames, with a gusto that won’t persist. Interpreting the early post-crisis period as the new normal could be an enormous mistake. Read the full story.