How The Pandemic Helped The Modern Mega-Corporation
By: Roderyk Boykin
The COVID-19 pandemic has greatly benefitted large corporations who have modern supply lines, at the expense of small businesses. We see this when looking at companies like Walmart and Amazon who continue to thrive due to the infrastructure they have instituted and how many small businesses are on the verge of collapse.
Walmart, Perfectly Positioned
This pandemic has not caused Walmart to lose any steam at all. In fact, according to Statista, their revenue is up by $9 billion from last year. This is due to the variety of ways that Walmart allows its consumers to obtain their products. From the outset of the pandemic, Walmart has been able to offer not only delivery, online ordering, and pick-up but was also able to keep in-store shopping. Walmart has been able to do this due to their vast stature and capital allowing them to implement the needed infrastructure. Smaller businesses simply don’t have the means to do this. For example, according to Cision, Walmart just invested $3.5 billion to upgrade its Canadian supply chain alone.
Amazon, Picking Up The Slack
Similarly positioned, Amazon had the infrastructure in place to not only survive but to succeed and absorb the lost sales of its competitors. With people being locked inside their homes and not frequenting their favourite stores as much, people needed an alternative way to get their items quickly. They turned to Amazon, whose global supply chain spans over 17 countries according to eMarketer. In turn, consumer spending between May and June this year was 60% higher than last year. Revenue from Q1-2020 to Q3-2020 increased by $1.382 trillion.
Small Business, On The Losing End
On the other side of the spectrum, we have the small business owners. Between lockdowns, people avoiding in-store experiences due to the virus, and many of these stores lacking the proper infrastructure, they’ve been seeing continuous losses to larger corporations. According to NewsWire, 64% of respondents cited COVID-19 as a reason to avoid making purchases in-store. Therefore, consumers preferred alternative means of acquiring their goods. But because of the decrease in in-store sales, companies who lacked the resources before, still lack the ability to institute proper delivery and pick-up options. This isn’t even taking into account that these small and medium-size businesses could never match the shipping discounts that get provided to firms like Walmart and Amazon due to their colossal shipping volume. Factors like these have led the Canadian Federation of Independent Businesses to release reports that detail an estimated 158 000 small businesses are at risk of closing in Canada alone.
Therefore, we see that the pandemic has greatly helped large companies with modern supply lines and infrastructure, at the expense of smaller firms that lack them. This is seen with corporations like Walmart and Amazon who continue to succeed and siphon off what little money smaller firms are able to make in these difficult times. The rich get richer and the poor get poorer.
- https://www.marketplace.org/2020/08/18/walmart-prepared-for-ways-customers-shoppin g-in-pandemic/
- https://www.newswire.ca/news-releases/walmart-canada-announces-major-3-5-billion-in vestment-for-growth-and-customer-experience-transformation-809231149.html
- https://www.newswire.ca/news-releases/covid-19-drastically-shifting-how-canadians- shop-celebrate-and-spend-good-news-for-amazon-842442992.html
- https://www.ctvnews.ca/health/coronavirus/new-closures-will-be-fatal-for-thousands-of-s mall-businesses-advocate-warns-1.5184987
*All arguments made and viewpoints expressed within Youth In Politics and its nominal entities do not necessarily reflect the views of the writers or the organization as a whole.
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