SDYNEY: The outbreak of coronavirus may have cost China’s retail and food service sectors billions of US dollars in sales during the Lunar New Year week, according to a leading food and agricultural bank.
Revenue lost in both retail and food services during the Lunar New Year week could range from 20% to 80%, representing a fall of US$31bil to US$124bil, as major chains shuttered stores across the country, Rabobank said in a report.
China’s industries, including food and agriculture, are bearing the immediate brunt of the coronavirus outbreak “as heavily-hit cities are under lockdown while the rest of the country rapidly hunkers down, ” Rabobank analysts led by Ping Chew said.
The impact could be more serious and longer-lasting if the virus isn’t contained within the first quarter, they said.
Store closures by retailers Starbucks, Haidilao, McDonald’s, and Yum China came during a period when food service and retail sales were tipped to gain 8% to US$155bil, the bank said.
The losses from food service alone could total US$8.8bil to US$13.6bil, it said.
The extent of total damage will depend on how long it takes before the coronavirus outbreak, which has now caused more than 1,000 deaths in China, is contained, Rabobank said.
The food service sectors in Singapore, Thailand and Vietnam are also likely to be affected in the first quarter, as Chinese tourist numbers fall.
Food and beverage necessities like soft drinks are resilient to the virus while frozen foods, ready meals and bottled water may benefit due to panic buying.
Alcoholic drinks will be more affected, especially baiju, a Chinese spirit where 30% to 50% of full-year revenue comes during festival holidays. — Bloomberg
What do you think of this article?