Business
As virus-wary shoppers opt for online purchases, retailers pay the price
LOS ANGELES(Reuters) – Online sales may be a saving grace for pandemic-battered retailers with fewer shoppers in their stores. But many retailers, from department store chain Macy’s Inc to essential retailer Target Corp, are grappling with higher expenses related to e-commerce.
Retailers often use the more lucrative in-store sales to subsidise hefty e-commerce costs, ranging from marketing to fulfilment and shipping. Companies don’t usually break out those expenses, which of late have been overshadowed by massive write-downs for unsold inventory and lower online profits.
Margins for the hardest-hit nonessential retailers – including mall-based clothing chains – on average are this year likely to be about half what they were in 2019, according to credit ratings agency S&P Global. The shift to e-commerce probably erased a couple of percentage points from company margins, Sarah Wyeth, senior director for retail and restaurants said.
When it comes to online sales, “retailers have always given away too much margin,” said Neil Saunders, managing director at GlobalData Retail. “Now that more stores are closed and online penetration is higher, losses have exploded.”
Historically, sales in stores accounted for more than 80% of all retail sales in the United States, according to eMarketer. E-commerce as a percentage of retail sales, excluding gas and auto, zoomed to 22.9% in the second quarter after the pandemic accelerated the shift to online shopping, said Andrew Lipsman, principal analyst at that research firm.
As of mid-July, the spike of COVID-19 infections around the United States has spurred states such as California to shutter indoor shopping malls – further endangering in-person transactions, which are generally lower cost.
Almost 18% of Macy’s stores are in California.
On July 1, the retail operator, which also owns Bloomingdale’s store, said gross margin tumbled to 17.1%, down more than 21 percentage points from a year earlier.
Macy’s CEO Jeff Gennette said the chain was seeing “a noticeably worse trend in brick-and-mortar” stores in Texas, Florida and Arizona, where infections are setting new records.
“Conversely, in those particular states, the dot-com business is improving,” he said on the heels of posting a staggering $3.58 billion loss for the quarter that ended May 2.
Fast-forward, tighter squeeze
RSR Research co-founder Paula Rosenblum estimated that typical online orders cost retailers roughly 10-15% more than purchases in stores, where shoppers do the work of selecting items and transporting them home. Her calculation does not include returns, which are more common with e-commerce purchases because shoppers don’t see, touch or try on products beforehand.
While Amazon.com Inc, Walmart Inc and other deep-pocketed companies can spend heavily on projects like automation and inventory tracking to reduce e-commerce expenses “a lot of companies are on the ropes and can’t afford to,” said Hilding Anderson, senior director of strategy and consulting at Publicis Sapient.
Target stayed open throughout the early stages of the pandemic, but its gross margin fell 450 basis points in the first quarter, when digital sales surged 141%. The retailer blamed the deterioration on apparel write-downs, a shift to lower profit sales of food and essential items, and rising digital fulfilment and supply chain costs.
“Our first quarter digital volumes weren’t anticipated for another three years … It was an extreme test of our model and our team,” Target Chief Operating Officer John Mulligan said on a May 20 conference call.
Meanwhile, FedEx Corp and United Parcel Service Inc have a lock on e-commerce delivery, but lost a significant amount of high-margin business when offices shuttered. Those carriers are raising their prices to offset the explosion in higher-cost home deliveries of everything from food to furniture and electronics and exercise equipment.
“The margin squeeze might go on for a while,” said Gabriella Santaniello, founder of retail research firm A Line Partners. “It’s going to be really hard to put the genie back in the bottle.”
Reporting and photo: Reuters
Bestbuy Maldives (BBM) has presented a brand-new Honda Airblade motorbike to the winner of a lucky draw held to mark the opening of its newest wholesale outlet in Hulhumalé Phase 2.
The outlet, located at Lot 20286 on Nirolhu Magu, opened on 16 February 2026 as part of BBM’s expansion of its wholesale operations.
To celebrate the opening and thank customers for their continued support, BBM introduced a special lucky draw exclusively for customers who made purchases from the new outlet on its opening day.
Customers who purchased products during the opening were eligible to enter the draw, with a Honda Airblade motorbike offered as the grand prize.
The lucky draw was conducted on 13 August 2026, with Ibrahim Shifaz of Vagthun Vaguthah outlet selected as the winner.
Shifaz was recently presented with the ceremonial key to the Honda Airblade by AVS Subrahmanyam, Chief Operating Officer of Bestbuy Maldives.
The promotion formed part of BBM’s activities surrounding the opening of its Hulhumalé Phase 2 outlet, which provides customers with access to the company’s range of wholesale products from the growing residential and commercial area.
Bestbuy Maldives is a supplier and distributor serving businesses across the Maldives, including customers in the hospitality, food service and retail sectors.
Male’ Aerated Water Company (MAWC), the authorised bottler of The Coca-Cola Company in the Maldives, on Thursday hosted the Official FIFA World Cup 2026™ Match Ball Handover Ceremony, presenting Football Legends of Maldives with official FIFA World Cup 2026™ match balls signed personally by Dr Mohamed Muizzu, President of Maldives.
Held in partnership with the Ministry of Youth Empowerment, Sports and Fitness, the ceremony recognised former national footballers whose achievements, service and influence have helped shape football in the Maldives and inspired generations of players and supporters.
The Coca-Cola Company has been an official partner of FIFA since 1974, making it one of the longest-standing partnerships in the global sport. For MAWC, the handover brought that global partnership to life locally by connecting the FIFA World Cup with people who have contributed to Maldivian football history.
As the sole authorised Coca-Cola bottler in the Maldives for over 35 years, MAWC has supported local sport through partnerships, campaigns and community initiatives. The ceremony continued that commitment by recognising the legacy of players who represented the Maldives and contributed to the growth of football in the country.
“Maldives’ football legends have given generations of supporters moments of pride and have played an important role in shaping the country’s sporting history. At MAWC, we believe recognising their contribution is as important as supporting the next generation. Through our partnership with Coca-Cola and FIFA, and in collaboration with the Ministry of Youth Empowerment, Sports and Fitness, we are honoured to celebrate their legacy. These match balls are a token of our appreciation for what they have given to Maldivian football,” said Milind Derasari, Chief Operating Officer, MAWC.
Adding to the excitement of the football season, MAWC ran a nationwide FIFA World Cup 2026™ consumer promotion from 21 March to 24 May 2026. Eight winners received an all-expenses-paid experience for two to attend a FIFA World Cup 2026™ match. Hundreds more won Coca-Cola branded merchandise and other prizes during the campaign, bringing the excitement of the world’s largest football tournament to consumers across the Maldives.
MAWC remains committed to building partnerships that support the development of sports across the Maldives, working with the Government of Maldives and other partners.
Coca-Cola Maldives is turning up the excitement with the launch of its 2026 football campaign, bringing fans across the country a season packed with prizes, shared moments and exciting ways to celebrate the game together.
As the build-up to the FIFA World Cup 2026 begins, Coca-Cola Maldives is inviting consumers to join in the fun with a campaign built around everything that makes football special: the anticipation, the matchday thrill, the watch parties, the celebrations and the memories made along the way.
From March to May, consumers in the Maldives will have the chance to take part in the Coca-Cola Maldives FIFA World Cup 2026 promotion, with weekly prizes, branded merchandise and a grand prize experience linked to one of the biggest sporting events in the world.
As part of the campaign, Coca-Cola Maldives is rolling out the UTC Promo from March 21 to May 24, giving consumers even more ways to be part of the football excitement. Special promotional packs will feature a unique code either under the cap or under the tab, depending on the product format. For 500ml, 1.25L and 2L PET bottles, codes will appear under the special Golden Caps on Coca-Cola, Sprite, Fanta Orange and Fanta Strawberry. For 330ml cans, codes will appear under the tab on Coca-Cola. Consumers can enter by sending the code via SMS to 2626 for the chance to win a range of prizes throughout the campaign period.
The promotion will run across 330ml cans as well as 500ml, 1.25L and 2L PET bottles, making it easy for consumers to join in whether they are picking up a drink for themselves, sharing with friends, or stocking up for a matchday gathering. With multiple participating brands and pack formats included in the promotion, Coca-Cola Maldives is creating more opportunities for consumers across the country to take part in the campaign and enjoy the football season together.
At the top tier, eight winners will receive an all-expenses-paid experience for two to watch a FIFA World Cup match live, creating a once-in-a-lifetime football moment. Under Tier 2, 60 winners will receive Coca-Cola branded mini-coolers, while 120 winners will take home Coca-Cola branded football-shaped personal coolers. Under Tier 3, 180 winners will receive Coke and FIFA branded footballs, adding even more play and energy to the season.
Adding a live moment to the excitement, the first set of winners will be announced on ICE TV on April 6 at 9pm, with winner announcements continuing every week throughout the promotion. This weekly reveal is set to bring an added sense of anticipation and shared excitement as the campaign unfolds across the Maldives.
The campaign is designed to bring fans closer to the game and make every football moment even more enjoyable. Whether it is watching a match with family at home, catching the action with friends at a café, or picking up a favourite Coca-Cola pack from a neighbourhood store, Coca-Cola Maldives aims to be part of the moments that make football season unforgettable.
“Football has a way of bringing people together like nothing else, and that is what inspired this campaign,” said Mario Perera, Country Head for Sri Lanka and the Maldives. “In the Maldives, the game is enjoyed in such a lively and social way, and Coca-Cola Maldives wanted to create a campaign that feels fun, relevant and easy for people to be part of. It is about celebrating the season, enjoying the experience with others, and giving fans something extra to look forward to.”
Adding to the excitement, Coca-Cola Maldives will also launch collectible country packs in the Maldives from May to July, giving fans the chance to celebrate the global game in a new way. Inspired by some of football’s most recognised nations, these limited-edition packs will bring a colourful and collectible twist to the season.
Across the Maldives, Coca-Cola Maldives will work with retail partners to bring the campaign to life through in-store visibility, promotional touchpoints and selected local activations that capture the spirit of football and community.
“The Maldives is a unique market, and Coca-Cola Maldives wanted this campaign to connect with the way people here enjoy football, together, with energy, and with a real sense of occasion. Coca-Cola Maldives is excited to bring that spirit to life in the months ahead,” added Mario Perera.
This marks the start of Coca-Cola Maldives’ 2026 journey in the market. With more fan moments, more excitement and more ways to join in still to come, Coca-Cola Maldives is looking forward to celebrating the football season with consumers across the country.
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