How Target and Kroger are handling stock issues

Yahoo Finance’s Alexis Christoforous, Brian Sozzi, and Dan Roberts discuss what Target CEO Brian Cornell says the company is doing amid the coronavirus outbreak, and how Kroger is weathering the outbreak.

Video Transcript

ALEXIS CHRISTOFOROUS: I want to get a look at Target now. Out with earnings, they were mixed, but as we know, it's all about forward guidance. What are they saying about their business going forward throughout this pandemic? I want to bring in Brian Sozzi and also Dan Roberts. Brian, I know you were on the media call last night. What was your big takeaway from Target?

BRIAN SOZZI: My big takeaway, other than that it's starting to come under severe pressure, is that Target will finally have toilet paper back in stock, hopefully soon. I asked Cornell about this, because we've seen a lot of hoarding in his stores. He sounded dismayed on the phone, [INAUDIBLE] continues to go on, despite them putting restrictions on things like toilet paper purchases. But he did tell me that the supply chain is working. So for all those toilet paper fans out there, coming back, hopefully very soon.

ALEXIS CHRISTOFOROUS: And what about Kroger? What's the news on Kroger this morning, Brian?

BRIAN SOZZI: Yeah, Kroger and Target, Alexis-- they're taking social distancing to [INAUDIBLE] Kroger is now installing plexiglass windows at its checkout just to cover a lot of its cashiers, to protect them and slow the spread of coronavirus. Target, also [INAUDIBLE] today, no longer accepting product returns. Also, they will be cleaning their checkout lanes after every single transaction and installing greeter at its checkout [INAUDIBLE] ensure people stay at least six feet apart.

ALEXIS CHRISTOFOROUS: All right. Dan Roberts, I want to get you in here. I would imagine we're going to see more of this, especially from the big box retailers. No returns, trying to keep distance from people, and human interaction to an absolute minimum.

DAN ROBERTS: Yeah, that's exactly right, Alexis. And Brian had a good write up on the web site this morning about these extreme measures that Target and Kroger are taking. I think this is going to establish the model moving forward. There's a couple of interesting things to unpack. Obviously, retail chains that are not essential right now have, across the board, closed all their US stores. There are a few exceptions, but in some cases, they've been criticized.

So Dick's Sporting Goods, for example, followed other retailers, said our stores are closed to customers, but most of their stores in the US are still open for curbside pickup of products. Which means the store workers still have to come into work. And some people have criticized that. They've said, well, does Dick's think that its products are essential right now, mid-coronavirus?

Target is sort of somewhere in between. Obviously, there's a lot that Target sells that is essential, even though Target isn't quite like a pure play grocery store-- and obviously, grocery stores have to remain open-- or a pure play pharmacy, like CVS. But it's obvious why Target has to stay open. I also think that taking these measures, that is, having-- as Brian noted in his story-- people whose specific role right now is to keep customers who are in the cashier lines six feet apart, and then with Kroger setting up fiberglass partitions, those extreme measures also show us that some chains are wisely realizing that it's going to be a while that we are in this situation. It's not going to be one week or two weeks. It's likely to be longer. Who knows? No one knows.

But I think Target looks very smart, because it's taking necessary steps rather than delaying those drastic steps and saying, well, we'll see. We'll see. It's like, you know what? We got to set it up now so that if this is weeks or even months, we can continue to be a place that people can come and feel safe and feel like they're not going to risk getting newly infected if they come to our stores right now. I think it's smart. I think it is going to become the standard.

ALEXIS CHRISTOFOROUS: All right. Yeah, really, really important for these companies to get in front of it. They may have already been a little late to the game, but at least they're doing what they can now, and not waiting. And that is so, so important. Dan Roberts, Brian Sozzi, thank you.