On the whole, big box retail stores fared well throughout the COVID-19 crisis, with some performing exceptionally and registering close to 100% increases in year-on-year profit.
Despite stiff competition from Amazon, retailers in this category managed to succeed primarily due to their size, which afforded them relatively larger cash reserves, extensive supply chain networks with robust contingency plans, as well as brand-associated reliability and trust.
Shifting consumer behaviors also contributed positively to large retailers' revenue and profits. Customers who may have previously visited a number of small specialty retailers to procure different items now choose to visit one large store – in almost all cases, a big box retailer – to complete their shopping more safely and efficiently, as well as minimize movement outside. Most big box retailers also witnessed a high surge in sales at the outset of the pandemic and ensuing lockdowns, as customers flocked to large stores – both online and offline – to stockpile essential goods.
Big box retailers who had innovative and accessible digital infrastructure in place performed significantly better, as features such as seamless in-app and click-and-collect orders reduced friction for customers staying at home.
Moving forward, large stores will need to be increasingly digital-focused and quick to evolve to shopping trends. The unstable economic climate also means retailers will need to develop deep discounting and bulk-buy programs to cater to a larger proportion of cash-strapped customers.
Cedar's experienced team of consultants have collaborated with large retailers worldwide to formulate and execute innovative business strategies, designed to adapt to an evolving and uncertain market.