Please ensure Javascript is enabled for purposes of website accessibility

Costco, Walmart, Target Finally See Coronavirus Sales Traffic Fall

By Daniel B. Kline – Apr 1, 2020 at 10:17AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

When people stockpile, they may (eventually) be able to skip some visits to stores.

While non-essential retailers have closed, chains that sell groceries, household items, and the other things people need during an extended stay at home have thrived. Costco (COST -1.40%), Walmart (WMT -1.93%), and Target (TGT -2.24%) have benefited, but new data suggests the rush may have ended.

"Following several weeks of massive year-over-year visit increases, Costco, Target, and Walmart all saw traffic declines for the first time since the crisis began," Placer.ai, a foot traffic analytics platform, reported. "While Sam's Club still saw a year-over-year increase, it is likely to be as much an indication of the company's overall resurgence as anything coronavirus related."

A closeup shot of a Walmart worker.

Walmart has been one of the chains doing well during the pandemic. Image source: Walmart.

People are stocked up

At some point, even the most prepared person only needs so much toilet paper. When that happens, the need to shop goes away and stores that had been hit hard see traffic pullback.

The data actually shows that the traffic slowdown has been driven by the areas where the strictest rules have been put in place about leaving your home. It's possible, even likely, that people in the hardest-hit areas are stocking up and then not doing as much, or any shopping.

"The positive here is that the data indicates that as the situation improves, and doesn't worsen, consumer behavior tends to return to more normal patterns," Placer.ai reported on its blog. "Should this trend hold, it's a very strong endorsement for those who believe that wider retail activity could quickly return to previous levels should the preventative measures being enacted serve their ultimate goal."

There's no new normal

Once the coronavirus pandemic passes, people will still need groceries. There might be a short-term dip in sales for some items people stocked up on, but other purchases may have been put off, making forecasting short- and medium-term sales difficult.

Daniel B. Kline has no position in any of the stocks mentioned. The Motley Fool recommends Costco Wholesale. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Walmart Stock Quote
Walmart
WMT
$129.70 (-1.93%) $-2.55
Costco Wholesale Corporation Stock Quote
Costco Wholesale Corporation
COST
$472.27 (-1.40%) $-6.71
Target Corporation Stock Quote
Target Corporation
TGT
$148.39 (-2.24%) $-3.40

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
326%
 
S&P 500 Returns
102%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/02/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.