Don't Underestimate Diageo's Resiliency
Like most consumer-facing companies, spirits producer Diageo (NYSE: DEO) has struggled with the effects of coronavirus-related shutdowns. It's not that consumers don't want its products. It's that they're having a relatively tough time getting them. Most restaurants remain closed, crimping on-premise sales that account for about half of the liquor's total business. The alcohol industry isn't coming out of the COVID-19 contagion unscathed.
It may be faring far better than many people have presumed, however. While consumers clearly aren't buying their booze from bars and restaurants right now, they're buying a whole lot more alcohol from supermarkets and liquor stores than they normally would. Spirits sales continue to lead that charge, building on a trend that was set in motion before the coronavirus outbreak. That's good news for Diageo.
The Spirits Business, an industry news site, reported recently that through the week ending April 18, off-trade sales (that is, sales made in supermarkets rather than restaurants) were up 15%, according to data from Nielsen. The big increase extends a streak of big year-over-year growth that started to take shape in March, as millions and millions of consumers were increasingly told to stay home to curb the spread of COVID-19.
Source Fool.com
