Five percent to 10% of pre-Covid-19 demand could be decimated permanently, as 'lost store volume can't entirely be made up online,' Wells Fargo retail analyst Ike Boruchow said.
5% to 10% of pre-Covid-19 demand could be decimated permanently, as "lost store volume can't entirely be made up online," Wells Fargo retail analyst Ike Boruchow said.Pedestrians pass in front of a Macy's Inc. store in the Midtown neighborhood of New York, U.S., on Friday, March 20, 2020.is sure to leave many lasting effects on the retail industry, including bankruptcies, store closures and layoffs.
It could also mean a healthy fraction of consumer demand for clothes and shoes is lost forever, according to one analyst. Five percent to 10% of pre-Covid-19 demand could be decimated permanently, as "lost store volume can't entirely be made up online," Wells Fargo retail analyst Ike Boruchow said in a note to clients Wednesday.
Meantime, it could take at least nine months for sales levels to reach their "new normal," and consumers are likely not going to return to shopping like they used to until the 2020 holiday season, "at best," Boruchow added. Wells Fargo recently surveyed more than 1,000 U.S. consumers across various age demographics and found respondents, on average, plan to cut back their spending by roughly 8% compared with pre-Covid-19 levels. The firm said older generations are even more likely to cut back.However, he said, the pandemic has likely impaired consumer demand for apparel and footwear, longer-term.
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