U.S. e-commerce sales jumped 49% in April according to new data from Adobe’s Digital Economy Index from the baseline period in early March before shelter-in-place restrictions went into effect. Although retail sales hit a new low in April, consumers are willing to spend on products that will help them manage the COVID-19 crisis.
This has seen more people relying on online orders and delivery services, which have gained traction over the past few weeks. U.S. online grocery sales stand to surge around 40% in 2020. The jump may well be seen in other online sales categories with millions staying indoors to contain the spread of the virus.
Online Sales Soar in April
The 49% rise in U.S. e-commerce sales last month was driven primarily by strong online grocery. Online sales witnessed a 8.4% month-over-month increase. According to latest data from Adobe’s Digital Economy Index, online grocery sales increased 110% between March and April. Also, electronic sales were up 58% and book sales doubled.
The numbers indicate that consumers are willing to spend on products that will help them tide over the COVID-19 crisis. This took all the attention away from retail sales, which plunged 16.4% month over month in April, a lot worse than the predicted 12.3% decline. Grocery was the only bright spot, growing 13% sequentially in April.
Online Sales Poised to Grow
U.S. online grocery sales grew 22% in 2019 and, propelled by high demand from nationwide COVID-19 lockdowns, stand to surge about 40% this year, according to the Coresight Research U.S. Online Grocery Survey 2020. E-commerce accounted for roughly 2.6% of U.S. food and beverage retail sales in 2019, but the projected growth in online grocery activity would raise that to 3.5% or nearly $38 billion in 2020.
Although retail sales nosedived, online sales for consumer packaged goods were up 45% year over year for the four-week period ending May 2, according to U.S. ecommerce data from research and polling firm Nielsen and Rakuten Intelligence. Online grocery customers, too, are buying a bigger selection of items from retailers. In the 2020 U.S. Online Grocery Survey, respondents purchased an average of five grocery categories online compared with 4.4 last year.
The domestic economy has started reopening but the government is still struggling to contain the spread of the pandemic. Safety measures like at-home orders and strict social distancing will continue for at least a few more months now. Hence, more people will rely on online delivery, especially grocery and household staples. Given this situation, it might be prudent to invest in retail stocks that have a strong online presence.
Campbell Soup Company (CPB - Free Report) together with its subsidiaries, is a worldwide manufacturer and marketer of high-quality, branded convenience food products.
The company’s expected earnings growth rate for the current year is 21.3%. The Zacks Consensus Estimate for current-year earnings has improved 3.3% over the past 60 days. Campbell Soupcarries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
B&G Foods, Inc. (BGS - Free Report) along with its subsidiaries manufactures, sells and distributes high-quality, shelf-stable, frozen food and household products across the United States, Canada and Puerto Rico.
The company’s expected earnings growth rate for the current year is 21.3%. The Zacks Consensus Estimate for current-year earnings has improved 19.2% over the past 60 days. B&G Foods sports a Zacks Rank #1.
Conagra Brands Inc. (CAG - Free Report) offers premium edible products with refined focus on innovation. The company maintains a highly dynamic product portfolio and incorporates alterations within it as per the preference pattern of end users.
The company’s expected earnings growth rate for the current year is 10%. The Zacks Consensus Estimate for current-year earnings has improved 8.3% over the past 60 days. Conagra Brands has a Zacks Rank #2.
Flowers Foods, Inc. (FLO - Free Report) produces packaged bakery foods in the United States. The company specializes in baked food products as well as produces a wide range of breads, buns, rolls, snack cakes and tortillas.
The company’s expected earnings growth rate for the current year is 14.6%. The Zacks Consensus Estimate for current-year earnings has improved 5.8% over the past 60 days. Flowers Foods carries a Zacks Rank #2.
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