Amazon rivalry prepped big-box retailers for coronavirus

A demand to keep up with the e-commerce giant helped keep stores like Target and Walmart on their toes

Big-box retailers enjoying strong sales and profits over the past couple of weeks partially attribute their success to pre-COVID-19 pandemic efforts to take on e-commerce giant Amazon.

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Nearly six months into the global health crisis, large sellers like Walmart, Home Depot, Target and Lowes have seen positive results from expanded digital sales and delivery options.

Last week, Target Corp posted an 80% increase in earnings and Lowes saw a similar leap of 75%. Amazon.com Inc's profits doubled to a record $5.2 billion in three months through June.

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Although some had struggled with rising costs and complications from COVID-19 in the first few months of the year -- trying to keep workers and customers safe and product moving -- representatives told The Wall Street Journal Monday they were prepared.

With cash on hand to help transition to post-pandemic life, companies that had already invested in online businesses were selling what people were buying. They also had large supply networks and could frequently restock and handle the sharp increase in online orders.

Additionally, while America's smaller businesses remained closed, big-box stores like Target were deemed essential.

People wearing masks wait in line to enter Target in Herald Square, New York City, amid the coronavirus pandemic in May 2020. (Photo by Alexi Rosenfeld/Getty Images)

While shoppers have been visiting home improvement chains and food retailers, stores like Walmart served as the middlemen.

The Wall Street Journal reported that Walmart, Amazon, Target, Home Depot, Lowe’s and Costco accounted for 29.1% of all U.S. retail sales in the second quarter.

Smaller retailers just didn't have the resources necessary to handle the situation being thrust upon them -- they were forced to pivot or shutter permanently. Revenue-tracking firm Womply said sales at 70,000 smaller retailers fell 7% between March and mid-August.

Target and Walmart had mobile apps and delivery networks where many department stores and apparel retailers did not.

TickerSecurityLastChangeChange %
WMTWALMART INC.137.25-0.02-0.01%
AMZNAMAZON.COM INC.3,174.05+78.92+2.55%
TGTTARGET CORP.156.46+2.11+1.37%
HDTHE HOME DEPOT INC.272.33+3.78+1.41%
LOWLOWE'S COMPANIES INC.162.59+3.04+1.91%
COSTCOSTCO WHOLESALE CORPORATION349.62+7.04+2.06%

Big-box stores also benefitted from higher prices and a strong consumer demand, boosted by government stimulus checks.

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Accelerated services -- like same-day pickup and delivery -- increased sales for Target by 270%, with sales from digital channels accounting for 17.2% of Target’s total revenue for the quarter.

It was the highest percentage in company history.