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Mass Merchandisers: Incl Impact of COVID-19 - US - December 2020
Overview
 
What you need to know
Unlike most retailers, mass merchandisers are currently benefiting from value-seeking shoppers who are prioritizing essential items, affordability and convenience. Some consumers are even shopping mass retailers more frequently and have more loyalty to them; consequently, sales at mass retailers will continue to grow. Their low-price guarantee and essential products get consumers in the door, but experiences (both in-store and online), such as external partnerships and online personal shopping services, will keep shoppers frequenting mass retailers.

Key issues covered in this Report
●	The impact of COVID-19 on consumer behavior and mass merchandisers
●	How mass merchandisers’ value proposition will position them for growth during the recession, as it did in 2008
●	Mass merchandisers position as a primary shopping destination and what that means for specialist retailers
●	How mass retailers can improve the online experience moving forward

Definition
This Report focuses on mass merchandisers, including major players in the US market, as well as a detailed exploration of consumers’ attitudes, usage and shopping behaviors in this category.

For the purposes of this Report, Mintel has defined a mass merchandiser as a large retail store offering a wide range of product categories, often at discounted prices, including but not limited to appliances; clothing and accessories; shoes; furniture; office equipment; household products; health, beauty and personal care products; electronics; music and entertainment; sporting goods and food. These stores have central customer checkout areas, generally located in the front of the store, and may have additional cash registers located in one or more individual departments.

This Report will focus on key national players in the market including Walmart, Target and Kmart, and it will also address other regional players such as Meijer.

This Report builds on the analysis presented in Mintel’s Mass Merchandisers – US – December 2017 and March 2015.

COVID-19: market context
The first COVID-19 case was confirmed in the US in January 2020. On March 11, the World Health Organization declared COVID-19 a global health pandemic, and on March 13, President Trump declared a national emergency in the US.

Across the US, state-level stay-at-home orders rolled out throughout the months of March and April, remaining in place through May and in some cases June. During this time, referred to as lockdown, nonessential businesses and school districts across the nation closed or shifted to remote operations. Mass merchandisers were deemed essential and consequently were able to keep stores open, resulting in increased demand and foot traffic. The sudden changes forced mass retailers to implement new safety and sanitation procedures and allowed them the chance to promote their omni-channel shopping options, such as curbside pickup or mobile shopping. This has resulted in increased shopping frequency among some consumers and continued positive sales growth.

During re-emergence, all 50 states have relaxed stay-at-home orders and allowed businesses to operate with varying levels of social distancing measures in place. The continued spread of COVID-19 infections has driven some states to slow down or reverse course on reopening plans. Even as stores reopen, some consumers remain hesitant to shop on-site, causing mass retailers to continue to evolve ecommerce capabilities. Additionally, as consumers remain focused on value (namely affordability) throughout the recession, mass retailers can promote store brands and look for new ways to evolve them, such as offering sustainable private label products.

Mintel anticipates the US will remain in a state of flux through 2021, until a vaccine is available.

Economic and other assumptions
The analysis provided reflects an estimated range of the market’s prospects in light of the upheaval caused by the COVID-19 crisis. Mintel’s economic assumptions are based on CBO 10-year economic projections released on July 2, 2020. The CBO expects US GDP to fall by 5.8% in 2020 and recover to 4.0% growth in 2021.Unemployment estimates from the CBO indicate a 10.6% rate for 2020, declining to 8.4% for 2021, which is slightly more positive than initial expectations (11.5% in 2020 and 9.3% in 2021), though expectations are that it will remain above 5% through 2025.

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