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Retail therapy time is overMENA

Retail therapy time is over

The retail sector is revolving around an adapt to survive model and it’s looking difficult out there for retailers that aren’t getting with the times. Covid-19 brought a shift as more people flocked to conduct purchases through online shopping channels — which means that it’s a bit tough for those that haven’t quite integrated e-commerce into their operations fully. Saudi’s Savola Group, a parent company with holdings in food products, credits that shopping behavior shift alongside higher operating expenses as a few of the reasons for its recent 45% drop in profits.

The company isn’t alone as e-commerce giant, eBay (EBAY) also saw a mixed earnings release. The platform saw a 53% YoY decrease in its net income but this is largely due to the above-average figures it saw in 2020, when the pandemic’s impact was quite high on e-commerce. As a result, eBay’s net revenues were quite healthy and saw a 111% increase, driven by new features added to the site that provide a better buyer-seller experience.

why it matters

Savola’s dip in earnings is mostly a supply-side issue while eBay doesn’t have much to worry about given that, contextually speaking, its figures are still quite good. As e-commerce trends and consumer spending have recovered to pre-Covid levels, though, the obstacle becomes for companies like Savola to adapt their business models accordingly.