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Demand for all things stay-at-home may be over: Goldman Sachs

Brian Sozzi
Editor-at-Large

The money-making stay-at-home stock trade of 2020 — fueled entirely by the push of people into quarantines because of the COVID-19 pandemic — may be poised to cool down in the weeks ahead.

That’s mostly a result of states in the U.S. slowly reopening and folks returning to work, which is likely to mean fewer purchases of Campbells Soup and Zoom video parties compared to the blistering pace seen in the first quarter. By extension, the second quarter through the end of 2020 could see slower rates of sales growth for stay-at-home minded companies — note explosive first quarter growth is what lit a fire under the stocks in recent months.

New data crunched by Goldman Sachs — which for months has tracked mobility trends and app downloads — suggests this slowing in demand for all things stay-at-home has begun.

From May 25-31, e-commerce app downloads decelerated to 99% year-over-year growth compared to 149% in the previous week. Amazon, Walmart, Target, eBay and Costco all showed significant growth slowdowns week-over-week in app downloads. That hints fewer individuals desire to order products ahead or have time to browse if they could simply pick up goods on the way home from work and are in fact working all day.

Similarly, Apple iOS gaming downloads only rose 3% week-over-week after a 16% increase the week prior. It marked the second consecutive week of slowing app download growth for games on iOS. Hey, who has time for gaming if you are back on the factory floor building cars or widgets.

Meanwhile, app downloads for Uber and Grubhub — lifelines to food for many households during the pandemic with restaurants shut — flat out declined in the last week. Grubhub saw a 5% decline in weekly app downloads, where UberEats saw a plunge of 23%.

Grouping of popular restaurant mobile apps on an iPad screen. Apps include fast food restaurants such as McDonalds, Subway, Chick-fil-A, Domino's, Dunkin Donuts and Jimmy Johns as well as meal delivery site Grubhub.

Goldman’s sources for the app download data include Sensor Tower, Catalina, and Facteus.

“Our read across these data sources continues to describe a landscape we’re all very familiar with: lots of eCommerce deliveries, streaming media, and video chats taking the place of concerts, travel, and time at the office. While that picture remains very one sided in the data, with a larger number of cities and states beginning to look for ways to reopen, we expect to see the scale shifting higher over time, showing less stay-at-home activity and more signs of back to normal,” said the report’s lead author Heath Terry.

Zoom acknowledged a more normal pace of growth, too, exiting a bang-up first quarter. CFO Kelly Steckelberg told analysts on an earnings call Tuesday the number of daily participants using Zoom “came down a little” in May.

Brian Sozzi is an editor-at-large and co-anchor of The First Trade at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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