P&G, Albertsons Say Covid-19 Shopping Patterns Are Here to Stay
Consumer behavior has changed dramatically during the pandemic. When it ends, shoppers are going to have a hard time letting go of those new habits.
That “stickiness” underpinned stock gains Tuesday as several of the world’s most well-known brands reported soaring sales despite the volatile environment. With people still stocking their pantries and sprucing up their homes,Procter & Gamble Co. had one of its best quarters in years, while grocerAlbertsons Cos. and Lysol-makerReckitt Benckiser Group Plc saw heightened demand as well.
“We do expect that there is some stickiness to new habits that are being formed,” P&G Chief Financial Officer Jon Moeller said on a conference call. “It’s hard for us to see in our interactions with consumers that we’re going to snap back and revert to the same attitudes and the same behavior that we had collectively pre-Covid.”
The comments offer new insight into shopping patterns after the Covid-19 outbreak prompted sharp pullbacks in some discretionary purchases and increased buying of groceries, cleaning supplies and home goods. Investors have been looking for indications of how long the changes could last once the pandemic subsides.
P&G shares climbed 0.9% at 11:43 a.m. in New York, while Albertsons jumped 5.3%. Reckitt Benckiser was unchanged in London.
For P&G, the maker of well-known brands such as Tide laundry detergent and Charmin toilet paper, consumer trends are squarely in its favor. With no immediate prospects for a widely available Covid-19 vaccine, that elevated demand should continue, Moeller said.
The company said its organic sales growth, which strips out some items like currency swings, rose 9% in the quarter ended Sept. 30, thebest performance since 2005. Its home and fabric care revenue, in particular, surged.
“I don’t see any reason that we shouldn’t be able to sustain strong results,” Moeller said.
With Lysol remaining a hot commodity, Reckitt Benckiser shared that optimism. Chief Executive Officer Laxman Narasimhan sees sales increasing by low double-digits in the upcoming fiscal year after previously projecting revenue growth in the high single-digits. The company said 86% of consumers are changing their hygiene practices.
The sustained demand for consumer-goods products is also lifting the prospects of grocery stores. Albertsons, which owns chains such as Safeway, reported identical-storesales growth of 13.8% in its latest quarter and boosted its short-term projections. It wasn’t panic-buying or stockpiling that lifted the grocer’s sales, either; rather there was “a lot of steadiness” in the ways consumers are shopping, Chief Executive Officer Vivek Sankaran said in an interview.
The company now expects identical-store sales to rise to 15.5% or more in the current fiscal year. Sankaran said higher spending on groceries is here to stay, and he sees Albertsons “growing from a new baseline” whenever there’s a return to normal.
“It’s clear that people are cooking a lot more home and spending a lot more time at home,” he said.
Source: Read Full Article