Coping with Covid-19 - the Business Response

Covid-19 industry specific insights – latest data

By Mungo Keulemans, CEO at PMR Ltd

Four months into the Covid-19 global pandemic, scientists around the world are beginning to find methods to understand, diagnose and work on treatments for this deadly virus. From a business perspective, due to the momentum of the global economy, we are only becoming aware of the impact on necessary contingency plans for taking day-to-day business decisions.

Businesses large and small are acting on a daily basis to deal with the rapidly changing regulations which affect supply chains, freedom of operation, workforce availability and financial liquidity. Certainly, a wait-and-see attitude or management freeze will have a negative impact on business and economy as a whole.

PMR as a professional, sector-focused market research and reporting company has been conducting a variety of direct research polls, snap surveys, and monitoring data for the Polish market to assess and report on the actual impact of Covid-19. Based on the collected information, it is clear that for the sectors we cover – ICT, construction, retail, and pharmaceutical & healthcare, the situation varies significantly. There is no one-shoe-fits-all plan of action for meeting the business challenges and opportunities brought by Covid-19.

PMR’s most recent poll was conducted in late-April with direct interviews of 120 senior-level managers across the industries we cover. The data gave us sometimes a surprising picture of how companies are practically handling the situation. The results are summarised below.

In Poland’s construction sector 80% of enterprises are able to conduct their business without major disruptions. However, 45% of the companies interviewed have noted a drop in sales. Furthermore, 85% of companies expect revenues in the second quarter of 2020 to be around 20% lower. Almost three out of four companies have had to put a hold on investments within their organisations. Major challenges experienced are delays in regulatory building permits, reduced income on orders and some planned projects being cancelled.

The retail sector is a mixed bag with e-commerce seeing a sharp increase in revenues, whereas for HoReCa – due to regulations effectively stopping the ability to operate – the impact has been dramatic. Around 40% of the companies interviewed find it difficult to finance their operations. About 60% of them have seen a 45-50% drop in revenues, and 73% are expecting a decline of 30-40% in the second quarter of the year. A major challenge for the non-food sector is scarce demand. There are some opportunities for growth in e-commerce, specifically for product categories related to the hygiene recommendations. A considerable challenge moving forward will be a drastic change in consumers’ purchasing habits

From the ICT market viewpoint, 100% of the companies interviewed are able to operate normally. Surprisingly, all of them have fully implemented remote working. The challenges for this industry over the next few months are customers cancelling investment plans, the freezing or slowing down of ongoing projects, and supply chain management. ICT companies have noted a decline of around 15% in revenues and are cautious about the second-quarter results, with 40% of businesses predicting a rise in sales and roughly the same percentage expecting a fall. Opportunities for ICT are around e-commerce platforms and the set-up of remote work models.

For pharma & healthcare, 67% of the companies interviewed continue operations undisturbed. Key challenges relate to supply chain disruptions. Almost 30% of the companies are still planning to hire new employees. Only 27% of the businesses have noted a drop in revenues. Still, the majority of them are expecting a slump of around 30% in the second-quarter revenues. On a positive note, companies see an acceleration in digital transformation. A likely negative effect going forward will be potential problems with logistics and distribution. Based on up-to-date figures from our latest report on the OTC market, there has also been a large increase in OTC sales.

In conclusion, based on real data, each industry PMR covers has its own individual set of challenges and opportunities brought on by this pandemic. Companies should avoid making decisions on the assumption that across all sectors the situation is the same, and instead should rely on the latest available data for their specific sector. With 20-year experience analysing various industries, PMR is a business partner for relevant, updated market intelligence.

PMR also provides weekly insights with a Covid-19 focus on its Marketexperts sector sites.

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