Coronavirus

Some Companies Strained By Spike In Demand Amid Coronavirus

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While nonessential retailers remain shuttered amid the COVID-19 pandemic, some companies have discovered more business isn’t always a good thing.

As 270 million people in at least 33 states are being urged to stay put and consumers adjust to stay-at-home, stock-up lifestyles, it’s taking a toll on consumer-products companies and delivery firms, The Wall Street Journal reported on Wednesday (April 1).

Demand, the paper said, is forcing companies to spend more to manage the surge in sales as more profitable business lines dry up due to the coronavirus crisis.

Makers of household goods including Colgate-Palmolive Co. and Procter & Gamble Co. are selling out quickly of cleaning products, while their more expensive beauty supplies sit on the shelves, the report noted.

Retailers are boosting the hourly wages paid cashiers and stock clerks so they can sell more toilet paper, water and other essentials. But apparel and other items that lift profits aren’t moving.

Facebook, the social-networking platform, told the paper traffic is soaring. But it’s coming at a time when there’s been less online advertising.

News organizations are not exempt from coronavirus impacts. They say readership is up, but ads are down.

While Amazon is the beneficiary of a spike in new business as store closures move even more shopping online, the eCommerce giant told the WSJ it is spending hundreds of millions of dollars to hire additional workers and pay its existing workers more.

And delivery companies like FedEx and United Parcel Service (UPS) Inc. are in the midst of the kind of boom in home deliveries that comes at Christmas, while shipments to businesses have slipped with most businesses closed. Delivering to homes is less profitable because drivers ferry fewer packages across many more stops, UPS told the paper.

FedEx and UPS workers could face layoffs if the flow of packages continues to slow.

Its union has told UPS workers that there could be job losses during the slump, the report said. Some of the FedEx Ground division’s contractors have already laid off delivery drivers.

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