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Pivoting the Business - Wilmington Trust Market Forecast 2021
Skip to main content Skip to podcast with Kelly Rush, CIO of Principal Real Estate Securities Skip to podcast with Axel Hefer, CEO of Trivago Skip to podcast with Mark Mathews, Vice President of Research Development & Industry Analysis at the National Retail Federation

Who will be left standing?

Nearly every industry is hurting in some way as a result of the pandemic, and many—but not all—could be permanently impaired or forced to change the fundamentals of the way they operate.
We weigh in.

Picture of Meghan Shue
Contributor

Meghan Shue, Head of Investment Strategy for Wilmington Trust Investment Advisors, Inc. View bio

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Contributor

Jessica Blitz, Research Analyst for Wilmington Trust Investment Advisors, Inc. View bio

These three industries are fighting for their lives during the Great Pandemic.
Click on a button below to jump directly to a section, or scroll down to see them all.

Real Estate

More and more people are getting out of Dodge—that is, out of urban centers into second-tier cities and suburban neighborhoods. With living space increasingly doubling as work space, businesses are looking to accommodate employees fleeing to the Sun Belt or the Midwest.

2Q net absorption by region

High-growth areas in the Southeast and Midwest were the only regions to see an increase in office demand in 2Q 2020.

Map of US for Growing
Sq. ft.
Leased rate
Tampa
358,775
+0.7%
Indianapolis
180,913
+0.5%
Charlotte
173,867
+0.4%
Minneapolis/St. Paul
193,694
+0.3%
Palm Beach County
41,959
+0.2%
Jacksonville
36,111
+0.1%
Columbus
46,480
+0.1%
Detroit
80,395
+0.1%
Atlanta
119,097
+0.1%
Cleveland
23,792
+0.1%
Washington, DC
214,375
+0.1%
$28T

Size of the private and governmental nonresidential real estate market1

2.2B

Square feet of office space Facebook has acquired in Manhattan; tech companies have increased their footprint in the Big Apple over the past year, which may help offset some of the COVID-forced departures by other companies2

60+

Number of underutilized retail spaces converted to last-mile (near-delivery) warehouses since 20173

Picture of computer server room Chart showing investment performance by property sector, year-to-date through September 30, 2020. Lodging/resorts: -49.4%. Retail: -39.04%. Office: -30.2%. Healthcare: -22.6%. Self storage: +5.8%. Industrial: +9%. Infrastructure: +14.4%. Data centers: +25.8%.
Podcast icon
Podcast

A conversation with . . .
Kelly Rush, CIO of Principal Real Estate Securities

Picture of Kelly Rush

Office space has largely emptied in light of COVID-induced working from home. See what’s ahead for the commercial real estate sector.

Listen

Travel/Tourism

Nearly half of the 17 million leisure and hospitality jobs in the United States disappeared in March and April, taking out a significant chunk of the global leisure travel industry’s pre-pandemic market value of $4.7 trillion.4

U.S. domestic flight projections, as of June 2020
In millions

Chart showing Total U.S. domestic person trips, as of June 2020, in millions. In 2020 business travel is projected to be down 35% from 462 million 2019 to 300 million in 2020 then up by 87 million to 387 million in 2021. In 2020 leisure travel is projected to be down 28% from one billion 858 million in 2019 to one billion 332 million in 2020 then up by 353 million to one billion 685 million in 2021. *July 2020–2021 are projections. Source: U.S. Travel Association.
Picture of traveler on airplane
Podcast icon
Podcast

A conversation with . . .
Axel Hefer, CEO of Trivago

Picture of Axel Hefer

The virus has brought business and leisure travel to a halt, hurting companies that rely on it. Can a multi-trillion-dollar market shift tactics to protect against further devastating losses?

Listen

Disney's theme park segment's 2Q 2020 loss is an example of the broader industry income pinch.

Graphic showing Disney's theme park segment's 2 billion dollar loss in the second quarter of 2020 from 6.6 billion dollars in the second quarter of 2019.

Domestic Parks, Experiences, and Products revenue vs. total Disney revenue

Chart showing Domestic Parks, Experiences, and Products revenue vs. total Disney revenue. Total revenue averaged around 15 billion dollars per year from the first quarter of 2018 to the first quarter of 2019 with little fluctuation. Total revenue hit 20 billion in the second quarter of 2019, and peaked at 21 billion dollars in the fourth quarter of 2019. By the second quarter of 2020 total revenue was down to 11 billion dollars. Parks, Experiences and Products revenue stayed realtively stable at around 4 billion dollars per year from the first quarter of 2018 to the first quarter of 2020, with a 2 billion dollar drop in the second quarter of 2020.

Source: Disney.

Parks, Experiences, and Products Total
75%

Estimated percentage of airline revenue attributed to business travelers, who make up only 12% of all passengers5

Dice icon
-96.3%

Year-over-year change in casinos revenue in April 20206

-72%

January–August 2020 decline in returns for Norwegian Cruise Lines, the worst-performing stock in the S&P 500 over that period 7


Retail

31 North American retailers declared bankruptcy in 2020, 26 of which did so after the U.S. outbreak. A spike in e-commerce represents a permanent, structural shift that has been accelerated by the pandemic.8

Anchor Tenants

Anchor tenants make up around 30% of leasable area in malls, and are essential in drawing customers. Up to half of all anchor stores are estimated to close by the end of 2021.9

E-commerce sales as a percentage of total retail sales, with
Amazon an important component of the e-commerce industry

Chart showing Retail sales as a percentage of total sales, seasonally adjusted, with Amazon the proxy for the e-commerce industry. It shows a steady rise from zero in 1999 to 12% in the first quarter of 2020, with a sharp spike to 17% in the second quarter of 2020. Other key takeaways are the debut of Amazon Prime in 2005 at 3%, and Amazon's market cap surpassing Walmart in 2015 at 7%.

For example, Target, as one of the few stores to provide omni-channel delivery prior to the pandemic, benefited from increased usage of curbside pickup once people began avoiding in-person shopping. Although it had been offering curbside pickup for some time, its use was minimal until the massive uptick in orders once social distancing was in full swing.

734%

Hike in Target's 2Q 2020 curbside pickup orders, which cost the company up to 90% less than fulfillment using distribution centers.10

Picture of Target bags
39% of consumers 60 years and older reported purchasing groceries online for the first time during the pandemic.

Consumers 60 years and older who reported purchasing groceries online for the first time during the pandemic.11

Podcast icon
Podcast

A conversation with . . .
Mark Mathews, Vice President of Research Development & Industry Analysis at the National Retail Federation

Picture of Mark Mathews

Increased time spent at home has markedly transformed the way we buy and receive goods. See if the brick-and-mortar storefront is on its way out for good.

Listen

The landscape of business is evolving due to the pandemic, along with accelerating trends. So when the COVID dust settles, which industries will have toppled—and which will be left standing?

The Series Continues

Theme 1 Image

Overview

Seismic Shocks:
An Introduction

Man pulling rope with large quarter through levers that look like COVID19 molecules

Theme 2

Paying
for the Pandemic

Theme 3 Image

Theme 3

Navigating
the New Market

Outlook Image

Outlook

Building Portfolios
for Success

Learn More

Let's have a conversation about what the insights and trends revealed in our 2021 Capital Markets Forecast could mean for your investment portfolio and overall wealth management plan.