By March 23, Apple had lost $ 435 billion in market value in about five weeks, and many of its outlets were closed when the virus pandemic engulfed the global economy and stock markets. Meanwhile, a report from the National Bureau of Economic Research found that 2% of small businesses surveyed had closed for good in March.
On December 30, Apple’s AAPL,
Its stock market value was $ 2.29 trillion, up 133% since March 23. Meanwhile, Congress has approved nearly $ 300 billion in additional support for small businesses, money that many hard-hit owners only hope can help them survive until the pandemic finally subsides.
The success of Apple and other major technology companies and the struggles of the smallest companies is just one example of how the 2020 pandemic brought winners and losers to the corporate world. Wall Street recovered after March; Main Street is still struggling.
In 2020 it was not uncommon to work remotely in jogging pants – during meetings on video conferencing platforms such as Zoom ZM,
– then step on an expensive high-tech exercise bike and have your favorite restaurant dish delivered to your home (by a driver who is trying to make money and hopes not to catch the corona virus).
The downside of that scenario is of course abandoned office buildings, empty restaurants and sparsely populated gyms. And since few people were traveling, the aviation industry needed billions of dollars in government assistance and is still threatening to lay off workers.
What follows is a look at the companies that benefited from the pandemic and those that faltered.
First, the winners:
Great technology: Big Tech was by far the big winner of the pandemic. Lockdown orders accelerated the great shift in online life that was already underway. With work and shop-from-home suddenly the norm, profits proved resilient for Big Tech even as the pandemic crushed movie theaters, shopping malls and other industries. Apple, Microsoft MSFT,
Amazon AMZN,
Facebook FB,
and Google’s parent company Alphabet GOOG,
GOOGL,
now themselves account for about 22% of the S&P 500. Never before have five companies been so dominant on Wall Street. At the start of the year, those five accounted for less than 17% of the index. With 2020 closing, the pressure is mounting. Regulators across the country and the world are scrutinizing Big Tech, among other things, which could put their leadership at risk. (Take a closer look at the technical year here.)
Streaming services: As movie theaters closed and lockdowns spread across the country, people turned to the ever-growing number of video streaming services for entertainment. According to Nielsen, Americans increased their streaming time by 75% in the second quarter from a year ago as the pandemic accelerated the trend for people to watch TV online instead of via traditional cable. Among the new services launched were NBCUniversal’s CMCSA,
Peacock and WarnerMedia’s T,
HBO Max. Netflix NFLX,
was a big winner, with 28 million subscribers in 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,
whose other businesses, including movie studios and theme parks, were rocked by the pandemic.
Delivery services: While people squat at home because of the coronavirus, restaurant delivery companies that were only convenient in 2019 became essential businesses in 2020. Grubhub’s GRUB,
sales were up 36% through September as more restaurants began using app-based delivery services to survive full or partial shutdown of their dining halls. At Uber UBER,
Uber Eats’ delivery service brought in more money in the third quarter than the signature ride services. And the trend is global. For example, DoorDash now offers delivery to 390,000 merchants in the US, Canada and Australia. The company shares DASH,
were up 86% during their stock market debut on December 9.
Home workouts: Fitness regimens have shifted in a big way from the gym to the home in 2020. Interactive fitness bike maker Peloton PTON,
was one of the biggest winners of the workout-from-home trend. Sales for the first nine months of the year more than more than doubled to $ 1.9 billion as high-tech bicycles and treadmills found more homes. Subscriptions increased dramatically over the year, to just over 1.3 million in September, from 563,000 a year earlier. Meanwhile, gyms weren’t doing as well as people were avoiding crowded places. Planet Fitness PLNT,
saw sales decline 45% through September as the number of members declined and the company left employees. Others, such as 24 Hour Fitness, sought bankruptcy protection.
Pet supplies: More homebound Americans got pets during the pandemic, and investors have taken note. According to the American Pet Products Association’s National Pet Owners Survey 2019-2020, 67 percent of American households now have a pet. That’s more than about 56% 30 years ago. San Diego-based Petco WOOF wants to capitalize on the trend,
filed for an IPO this month. The details remain unclear, but last year’s IPO by Chewy, the online pet supplies retailer, provides a drool-worthy comparison. Chewy’s stock CHWY,
has quadrupled since its IPO in 2019. The stock of another pet supplies company, Freshpet FRPT,
has more than doubled this year.
And then there are the industries that lost ground in 2020:
To travel: Travel for work and leisure evaporated in 2020. Planes were empty and airports were ghost towns. On April 14, the Transportation Security Administration screened just 87,534 passengers at US airports, an astonishing 96% less than the same day in 2019. Southwest Airlines LUV,
CEO Gary Kelly said last month that business travel, a major source of airline revenue, is down 90%. Far fewer people also needed hotel rooms. Market data company STR said in late October US hotel occupancy for the year so far averaged 45%, up from 66% for all of 2019, and forget to escape a cruise: Most major cruise lines have voluntarily halted sailings from US ports to the end February 2021.
Small company: The coronavirus and the drastic measures taken by government officials to control its spread took a heavy toll on many small businesses in the U.S. Restaurants, hair salons, event planners, and other businesses that rely on people being around were particularly difficult-hit, like those associated with tourism. In April, payroll clerk ADP reported that nearly 20 million jobs were lost at US companies, more than half of them at companies with fewer than 500 people. A government aid program helped by providing more than 5.2 million loans to small businesses and nonprofits between April and August. Congress approved a new round of funding, but many companies were still able to fold.
Business attire: Loosening it up? More like you don’t even wear it. A significant proportion of the millions of people forced to work from home by the coronavirus pandemic are less likely to wear business clothes. According to retail analyst NPD Group, men’s suit sales fell 62% from March to October compared to the same period in 2019. People are opting for comfort over style, a trend that was already on the move but accelerated by COVID-19. Consumers “use active clothing for everyday purposes, which does not always include exercise,” said NPD analyst Maria Rugolo. That’s good news for makers of sweatpants, T-shirts and even pajamas.
Real estate: Commercial real estate is one of the sectors most affected by the pandemic, and there are doubts about how quickly it will recover. Vacancy in shops, offices and other types of real estate has risen sharply compared to a year ago. Apartments are going against the trend and benefiting from the increased demand for housing. Stocks in the real estate sector are one of the few sectors to decline this year. The pandemic 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 gathered momentum before the pandemic, have accelerated. The question is how much impact they will have on demand once the pandemic is over.
Fossil fuels: The oil industry was ravaged after travel was halted to contain the coronavirus, causing demand for jet fuel and gasoline to plummet. Producers were struggling before the pandemic hit, due to a weak global economy and a market inundated with cheap oil. As the coronavirus spread and Saudi Arabia and Russia started a price war, oil prices fell. Prices recovered but languished around $ 40 a barrel for months, well below what most producers need to break even. According to a study by Deloitte Insights, the oil, gas and chemical industries laid off 107,000 workers in the spring and summer. Oil giants Exxon Mobil XOM,
Chevron CVX,
and others limited their spending and reduced their workforce.