E-commerce received a significant boost from stringent lockdown and social distancing measures over the past couple of months. Customers who preferred to shop in brick-and-mortar stores earlier switched to shopping online for essential products such as food and groceries, along with medicines and other products of daily use.
In fact, this spike in online shopping is expected to stay in spite of the economy reopening, since the world still lacks a vaccine or certain medication to combat coronavirus. This is why it could be prudent to take a look at some of the stocks that are benefiting from the newly emerged ecommerce trends.
Online Shopping Trend Here to Stay
The rise in online orders is evident in the increase in operations of retail giants such as Amazon.com, Inc. AMZN and Walmart Inc. WMT, which hired thousands of new workers to meet growing demand.
Amazon has hired as many as 935,000 new employees worldwide during the pandemic. A major reason for the company to go on a hiring spree during the time is the virus breakout in its warehouses around the globe. The company had to keep up with the high number of orders as more employees took sick leaves.
In fact, Amazon also hired about 235,000 new workers during the health crisis to keep up with its sales that skyrocketed as consumers continued to stock up on essential products from the comfort of their homes. In addition, the retailer’s online sales spiked as much as 74% to a new record as it expanded home delivery and curbside pickup services.
Both retailers’ express delivery services drew a lot of attention too, because of their fast service amid the pandemic. A major reason for the spike in food and grocery products was because people started to cook at home as they couldn’t avail the facilities of dining out, as restaurants, bars and cafes shut down.
Apart from these, sales of ready-to-eat products, fast food orders, and coffee and breakfast offerings also made their way up. Sales of “comfort food” such as burgers and fried chicken rose as much as 30% in April, according to Grab.
The bottom line is, as more customers get used to shopping online and deliveries at their doorstep, the trend of online purchases will only be more prominent ahead.
3 Stocks to Buy
We have, therefore, rounded up three retail stocks for you that have extensive online operations and offer a wide range of products. All of these stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Kroger Co. (KR) is a retailer that offers food products, medicine, general merchandise, seafood, organic produce and other grocery products. The Zacks Consensus Estimate for the company’s current-year earnings has moved 3.8% north in the past 60 days. Kroger’s expected earnings growth rate for the current year is 12.3%.
eBay Inc. (EBAY) is an ecommerce platform that offers a wide range of consumer products. The Zacks Consensus Estimate for the company’s current-year earnings has moved 2.3% north in the past 60 days. eBay’s expected earnings growth rate for the current year is 9.5%.
Vipshop Holdings Limited (VIPS) is an online discount retailer. The Zacks Consensus Estimate for the company’s current-year earnings has moved 7.8% north in the past 90 days. Vipshop’s expected earnings growth rate for the current year is 17.9%.
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Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
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