The once-strong economy has faltered due to the disruption caused by the coronavirus. People have cut their travel, mass gatherings are being canceled, and companies have held off on filling some open positions.
Market observers are wondering if the impact of the virus could send the economy into a recession. If that happens, however, some companies will thrive even as the overall economy struggles. These three businesses are built to weather a downturn and should do well even as others struggle.
When times get tough, people look for bargains. Costco Wholesale (NASDAQ:COST) offers savings on groceries, and you can head to the warehouse club to stock your pantry and get an inexpensive meal in the food court. Costco members also get a bit of entertainment in exchange for their membership fee; it’s fun to eat free samples and see what merchandise the chain has added, even if you don’t plan to buy anything.
The warehouse club chain will also benefit from having inexpensive gas and offering a variety of other low-cost services. Members will visit more often and spend more money if times get tight because Costco offers significant value to its members.
Dollar General (NYSE:DG) offers very low-cost merchandise, and that includes groceries — customers can buy food and household goods and meet other needs, often without having to go very far. The low-cost chain has been built to thrive when times get tough.
Dollar General isn’t the principal place most people shop. It’s generally more of a fill-in option. But in a recession, people may shop in smaller quantities more often, and that will benefit it.
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