On March 23, Apple lost $ 435 billion in market value in about five weeks, and many of its retail outlets were closed when the virus pandemic weakened the world economy and stock markets. Meanwhile, a report released by the National Bureau of Economic Research found that 2% of small businesses surveyed closed permanently in March.
On December 30, Apple’s AAPL,
The stock market value was $ 2.29 billion, up 133% since March 23rd. Meanwhile, Congress has approved nearly $ 300 billion in approval for small businesses, money that many hardline owners can only help survive until the pandemic finally eases.
The success of Apple and other major technology companies and the struggle of the smallest businesses are just one example of how the pandemic created winners and losers in the business world in 2020. Wall Street recovered after March; Main Street is still struggling.
In 2020, it was not uncommon to work remotely in sweatpants – while meeting on video conferencing platforms such as Zoom ZM,
– then hop on an expensive high-tech exercise bike and have your favorite restaurant dish delivered to your home (by a driver who wants to make money and hopes not to catch the coronavirus).
The other side of the scenario is, of course, abandoned office buildings, empty restaurants and sparsely populated gyms. And while few people traveled, the airline industry needed billions of dollars in government assistance and still threatens to lay off workers.
Following is a look at the businesses that have benefited from the pandemic, and the issues that have faltered.
First the winners:
Great technology: Big Tech was by far the biggest winner of the pandemic. Closing orders accelerated the great change in life that was already underway. With work-and-buy-from-home suddenly the norm, profits were resilient for Big Tech, even as the pandemic shattered movie theaters, shopping malls and other industries. Apple, Microsoft MSFT,
Amazon AMZN,
Facebook FB,
and Google’s parent company Alphabet GOOG,
GOOGL,
now accounts for about 22% of the S&P 500 alone. Never before have five companies been so dominant on Wall Street. At the beginning of the year, the five made up less than 17% of the index. With the closure of 2020, however, pressure is increasing. Regulators across the country and the world are putting Big Tech under the microscope, which could jeopardize their leadership. (Take a closer look at the technological year here.)
Power services: As movie theaters closed and shutters descended across the country, people turned their attention to the ever-growing number of video streams for entertainment. According to Nielsen, Americans increased their time lapse by 75% in the second quarter of a year ago because the pandemic accelerated the trend for people to watch TV rather than via traditional cable. Among the new services introduced was the CMCSA from NBCUniversal,
Peacock and WarnerMedia are T,
HBO max. Netflix NFLX,
was a big winner and added 28 million subscribers during the first nine months of the year. And Disney + gained 86.8 million subscribers in just one year, a bright spot for Walt Disney Co. DIS,
of which the other businesses, including film studios and theme parks, were raised by the pandemic.
Delivery Services: While people have fallen at home due to the coronavirus, restaurant delivery companies that were only convenient in 2019 became essential businesses in 2020. Grubhub is GRUB,
revenue rose 36% until September, when more restaurants began using app-based delivery services to completely or partially shut down their dining rooms. By Uber UBER,
Uber Eats’ delivery service brought in more money than its signature drive during the third quarter. And the trend is worldwide. DoorDash, for example, now offers delivery to 390,000 merchants in the US, Canada and Australia. The company’s shares DASH,
jumped 86% in their debut on December 9th.
Home workouts: Fitness regimens moved from the gym to the home during 2020. The interactive manufacturer of fitness bikes Peloton PTON,
was one of the biggest winners of the workout-from-home trend. Revenue more than doubled to $ 1.9 billion during the first nine months of the year as its high-tech bikes and careers found more homes. Subscriptions rose dramatically during the year, to just over 1.3 million in September from 563,000 a year earlier. Meanwhile, gyms did not fare so well because people avoided crowded places. Planet Fitness PLNT,
revenue fell by 45% until September when memberships fell and the company harassed workers. Others like 24 Hour Fitness have filed for bankruptcy protection.
Pet supplies: More home-bound Americans got pets during the pandemic, and investors took note. Sixty-seven percent of American households now own a pet, according to the 2019-2020 National Pet Owners Survey by the American Pet Products Association. This is higher than about 56% 30 years ago. Petco WOOF, based in San Diego, wants money to benefit from the trend
filed this month for an IPO. The details remain under scrutiny, but last year’s release by online retailer Chewy for pets offers a worthwhile comparison. Chewy’s stock CHWY,
has quadrupled since the 2019 exchange. The stock of another pet company, Freshpet FRPT,
has more than doubled this year.
And then there are the industries that lost ground in 2020:
Travel: Travel for work and leisure evaporated in 2020. Planes were empty and airports ghost towns. The Transportation Security Administration selected only 87,534 passengers at U.S. airports on April 14, 96% lower than the same day in 2019. Southwest Airlines LUV,
CEO Gary Kelly said last month that business travel, a major source of revenue from airlines, had fallen by 90%. Far fewer people also need hotel rooms. The market data company STR said that the US hotel occupancy averaged 45% for the year so far at the end of October, compared to 66% for the whole year 2019. And forget about escaping on a cruise: most major cruise companies have the cruise voluntarily discontinued US ports until the end of February 2021.
Small business: The coronavirus and the drastic measures taken by government officials to try to control its spread have seriously cost many small businesses in the US. Restaurants, hair salons, event planners and other businesses that rely on people being close were particularly difficult. hits, just like those associated with tourism. In April, pay provider ADP reported that nearly 20 million jobs were lost at U.S. businesses, more than half at businesses employing less than 500 people. A government aid program helped by issuing more than 5.2 million loans to small businesses and non-profits between April and August. Congress approved another round of funding, but many companies were still able to fold.
Workwear: Loosen it? More like not even wearing it. A large portion of the millions of people who had to work from home due to the coronavirus pandemic were less likely to carry business suits. According to analyst at retail industry NPD Group, sales of men’s suits fell by 62% from March to October compared to the same period in 2019. People are choosing more comfortable than style, a trend that was already underway but accelerated by COVID -19. Consumers “use active clothing for everyday purposes, which does not always include exercise”, said Maria Rugolo, NPD analyst. This is good news for manufacturers of sweatpants, T-shirts and even pajamas.
Property: Commercial real estate was one of the industries that hit the pandemic the hardest, and there are doubts about how quickly it will recover. Vacancy figures for retail, office and other property types are sharply higher than a year ago. Apartments are pulling down the trend and benefiting from the increased demand for housing. Shares in real estate are one of the few sectors that were lower during the year. The pandemic has forced millions of people to work from home and turn to e-commerce more than ever to buy groceries and other goods. These trends, which gained momentum even before the pandemic, accelerated. The question is how much it will affect the demand once the pandemic is over.
Fossil fuels: The oil industry was stunned after the trip was halted in efforts to curb the coronavirus, which dropped demand for jet fuel and petrol. Producers were already struggling before the pandemic struck due to a weak world economy and a market flooded with cheap oil. As the coronavirus spread and Saudi Arabia and Russia began to wage a price war, oil prices fell. Prices have recovered, but have fallen by about $ 40 a barrel for months, well below what most producers need to level. According to a study by Deloitte Insights, the oil, gas and chemical industries laid off 107,000 employees during the spring and summer. Oil Exxon Mobile XOM,
Chevron CVX,
and others curtailed spending and reduced their workforce.