And The Rich Became Richer

The Covid-19 pandemic has changed the world, killing almost 100,000 people across the globe so far, and throwing the US economy into a tailspin during a mandated quarantine

In addition to the restaurant and travel industries in the US, the retail industry has been especially hard hit in this pandemic. Although food/goods stores and online retailers have been considered necessary and continue to exist, department store chains and other ‘non-important’ retailers, both big and small, have been forced to shutter their doors.

Such cuts are grappling with potentially disastrous losses to cash savings and rising changes in customer behaviour that could ruin large swaths of brick-and-mortar retail and the 16 million workers employed by the industry. About 1 million supermarket employees have recently been furloughed in a single week, according to the Washington Post, and more than 250,000 stores have been shut, according to GlobalData Supermarket. Some experts expect that 15,000 department stores will shutter indefinitely this year, an improvement of 60 per cent from last year’s record closures.

Not every seller, though, struggles, well not the big ones. Both Walmart and Amazon, which already dominated a large percentage of mom and pop stores and electronic shopping in the US and the world indefinitely, the pandemic gave an enormous boost to their already considerable industries and strength. Searches for Amazon are at near-holiday-season levels; in-store revenues at Target skyrocketed in March; and both businesses employ 250,000 new employees. For the meantime, more and more consumers are transitioning to internet shopping and food delivery. They will not stick to their old habits until the pandemic stops and there is no assurance that this will end if the lock down does.

As the foot traffic to non-grocery stores fell by more than 97% over the last two weeks of March, Walmart retail revenue grew by 20 percent over the same span of March last year, according to the Wall Street Journal. The organization announced it was planning to recruit 150,000 new employees before the end of May.
And then there’s Amazon, which has accounts for about 40% of all The online shopping sales  about eight times more than its nearest rival, Walmart. Before the pandemic, the US e-commerce market accounted for just between 10% and 15% of overall retail revenue. Now that percentage seems likely to rise, Amazon is poised to have a larger edge over most other stores, including Walmart.

With millions of Americans told to sit indoors, Amazon is becoming more than ever a lifeline for millions of people than simply a simple place to buy online. Online spending on Amazon is up 35 per cent from the same time last year, according to Facteus, a firm that analyzes more than 30 million daily payment card purchases to deliver customer buying data to merchants and financial institutions. Labor numbers also reflect the success of the company; over the past few weeks alone, Amazon has employed 80,000 new employees.

Amazon CEO Jeff Bezos ‘company has also come under heavy criticism from politicians, regulators, and workers’ rights organizations since the pandemic because of some of the corporate policies that some find anti-competitive, and what some employees complain is a demanding rate of work in their warehouses. Even, it would have been hard to believe that Amazon would increase its influence exponentially in just two months, but the rapid spread of the pandemic did.

What does this mean for smaller business that were deemed non-essential and mom and pop shops? There is no guarantee that they will ever recover from being out of business for nearly two months or that consumer habits with automatically reset after the lock down. Thus, according to economic models unemployment rates are expected to double, and if this proceeds into early august we could expect more economic turmoil.