Virus-induced spending spurs sales at Home Depot, Walmart
NEW YORK — Americans turned to Walmart and Home Depot for supplies and do-it-yourself projects as they stayed close to home at a time when new cases of virus surged, resulting in soaring sales for their fiscal second quarter.
Walmart’s online sales nearly doubled in the fiscal second quarter, helped by an expansion of its online delivery services. Sales at U.S. locations opened at least a year jumped 9.3%, the company reported Tuesday. With customers not going out to eat as much, they’re cooking at home, spurring sales of groceries. They’re also buying items to set up their home office or improve their outdoor area, store executives said.
Home Depot, the nation’s largest home improvement chain, reported on Tuesday a 23.4% increase in sales at stores opened at least a year globally, helped by a frenzied pace of do-it-yourself projects. That’s almost twice the 12.2% increase that industry analysts had projected.
However, department store chain Kohl’s reported an adjusted loss that was smaller than expected and revenue fell 23% during the fiscal second quarter. The results came as Kohl’s worked to reopen its 1,100 stores after temporarily closing them all during the start of the pandemic.
“Some parts of retailing are thriving; some parts are being devastated,” said Neil Saunders, managing director of GlobalData Retail. “It’s demonstrating a dramatic shift of how and where shoppers are spending their money. People’s lives are revolving around the home. That means food, home improvement and comfortable clothes.”
Consumers had already begun to rely on Walmart, Home Depot and other essential retailers like Target and Amazon as lifelines for necessities during the start of the pandemic. Walmart’s online sales, for example, rose 74% for the fiscal first quarter. That trend accelerated to 97% in the second quarter and broadened the gap between traditional retailers, many of them anchor stores at the mall, and big box operators like Walmart and Target.
Kohl’s CEO Michelle Gass told reporters on a call Wednesday that the chain, based in Menomonee, Wisconsin, should benefit from mostly being located at strip centers. It’s also looking to capture sales from rivals that are closing. She also says that its home furnishings are resonating even more as shoppers are focusing on their home. During the second quarter, 50% of online sales were fulfilled in stores.
“We will be a beneficiary of consumers adopting more casual lifestyles and shopping more digitally,” Gass told analysts on a call.
With unemployment in the U.S. hitting frighteningly high levels, Walmart’s ability to deliver low-priced food, clothing and electronics strengthened its structural advantages further.