International

Levi’s, Mondelēz Face China Shutdowns In Coronavirus Crisis

Coronavirus Adversely Affecting Businesses Around The World

The coronavirus is forcing global businesses of all categories to scale back, close locations or even shut down for a while, according to The Wall Street Journal. So far, the disease has killed more than 130 people, and more than 6,000 are infected. 

Airlines have been affected, too. For example, British Airways and Lion Air from Indonesia are no longer flying into mainland China. American Airlines has stopped all flights from Los Angeles to Beijing and Shanghai. Delta is halving its flights to China.

Ford, JPMorgan and Kraft Heinz have all instituted travel bans to China.

“This will help reduce the unnecessary risk of virus exposure or transmission, and is the most prudent measure to take while we continue to closely monitor the situation in China,” said Michael Mullen, Kraft Heinz spokesman.

Google is shutting down its offices on the mainland, as well as in Taiwan and Hong Kong. Royal Caribbean cruise line cancelled three sailings for February, and said that the virus would hurt annual performance. Coffee chain Starbucks and Levi’s each closed about half their stores, and said their performance would be affected.

Oreo cookie maker Mondelēz International said it would see a drop in sales, and that two factories will remain closed per the request of government officials. KFC, Pizza Hut, Taco Bell and McDonald’s have closed locations as well. Spice making company McCormick has closed three of its plants in China, and it’s affecting Anheuser-Busch since some of its products are made there, too.

Procter & Gamble CFO Jon Moeller noted that the virus could have far-reaching implications. “It can also affect consumer confidence in large parts of the market,” he said.

Travel lodgings are taking a huge hit as well, as China makes up 6 percent of rooms for Hilton and 8.5 percent of rooms for Marriott.

Boeing CFO Greg Smith said, “The impact of the coronavirus on near-term traffic growth is clearly a watch item this year.”

Retailer Walmart asked for special permission to remain open to help make sure the population has access to essential products. In addition, insurance provider MetLife is eschewing waiting periods for benefits when people need to be treated for the virus.

There’s also a concern in the luxury market, of which China makes up one-third of all sales. CEO and controlling shareholder of Paris-based LVMH Moët Hennessy — Louis Vuitton Bernard Arnault expressed concern about the outbreak, and asked his team for input. He said that if everything blows over by March, it will be fine, but “if it lasts two years, that would be another story.”

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