The coronavirus pandemic has changed consumer behaviour in 2020 and beyond. Social distancing and isolation measures have shut down dine-in restaurants and deterred people from going shopping. As a result, instead of eating out or heading to the shops, consumers have opted for more convenient and, at times, cheaper alternatives.  

Here’s how e-commerce is revolutionising the food sector and the ASX shares that could benefit.

ASX supermarkets focussing on e-commerce

In early March, ASX supermarkets like Coles Group Ltd (ASX: COL) and Woolworths Group Ltd (ASX: WOW) saw unprecedented demand as consumers flocked to panic buy essentials. Some shoppers looked to bypass physically going to busy supermarkets and utilised online grocery delivery. Due to the demand, Coles and Woolworths were forced to shut down their online services.

With in-store sales starting to level out, both Coles and Woolworths have re-opened their online delivery and ‘click and collect’ services. According to the supermarket giants, the coronavirus pandemic has seen a surge in consumers adopting online grocery shopping.

In order to accommodate the expected change in consumer behaviour, Woolworths recently doubled its capacity for online grocery deliveries as the company expects $3 billion in e-commerce sales next year. The company has also hired an additional 5,000 third-party couriers to strengthen its current fleet of 800 delivery trucks in order to service more delivery orders.

Direct to consumer meal subscriptions

Subscription-based meal-kit providers such as Marley Spoon AG (ASX: MMM) have also seen a surge in consumer demand during the coronavirus pandemic. Marley Spoon, which delivers fresh ingredients directly to consumers, reported unprecedented demand, forcing the company to scale up its operations and expand its global workforce.

Marley Spoon currently operates in 3 primary regions; Australia, the US and Europe. The company recently completed a $16.6 million capital raising in order to strengthen its balance sheet and fund continued global expansion.

In an update to the market earlier this month, Marley Spoon revealed it had delivered 7.5 million meals in the first quarter of 2020 and reported its first-ever positive cash flow since its IPO.

The company also saw a 46% increase in revenue for the first quarter, with growth accelerated by the coronavirus pandemic. As a result, Marley Spoon expects to have an accelerated path to profitability and expects to achieve positive operating earnings before interest, tax, depreciation and amortisation (EBITDA) in the second quarter of 2020.

Foolish takeaway

In addition to supermarkets and subscription services, traditional takeaway operators like Domino’s Pizza Enterprises Ltd (ASX: DMP) have also reported a material surge in online demand. As a result, the company has been hiring team members in order to support the change in consumer demand.  

In my opinion, the coronavirus pandemic has irreversibly changed consumer behaviour and demand for certain goods and services. As long-term investors, this provides us with the opportunity to identify and capitalise on the trends that will become normal in the future.

I think investors should think of further shares and themes that could prosper post-pandemic and wait for positive price action before making an investment decision.

More reading

• Double your money with these high quality ASX shares
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• 4 top ASX 200 shares for blue chip investors
• 3 top ASX dividend shares you can buy today for income
• Negative interest rates coming? Here’s what it would mean for ASX shares

Motley Fool contributor Nikhil Gangaram has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of COLESGROUP DEF SET and Woolworths Limited. The Motley Fool Australia has recommended Domino’s Pizza Enterprises Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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ASX shares can help millennials retire before their parents.

There are a lot of people out there that have not been building up their retirement nest enough to be able to retire comfortably at 65, perhaps not even by 70.

I don’t know every family tree out there. If you’re a millennial who has parents who are about to retire in 2021 I’m not sure I can help. But the younger millennials – those born in the mid 1990s – have the potential to beat their parents to retirement if they work hard at it. I think ASX shares are key.

Why are ASX shares the answer?

I believe that most asset classes offer very little potential for long-term wealth growth. Cash and bonds offer very little return due to the RBA’s ultra low interest rate.

I think capital city property could be permanently changed by the coronavirus crisis. More people may decide to rent than buy with cheaper rental prices (lowering demand for property buying). Immigration could be low for a long time. Interest rates can’t really go any lower. People may want to avoid big cities and live in small regional areas.

ASX shares on the other hand are great for millennials to invest in. The purchase costs are very low (think how expensive stamp duty and other buying fees are). You can start with as little as $500, whereas you need a huge cash deposit for a property. Most of those property return calculations don’t include the costs of purchasing. Think of other costs of negative gearing, the loss of money when the property is vacant and so on. These usually aren’t included either.

Plenty of millennial parents may be invested in the wrong assets at the moment.

Which investments would be good ideas?

Not every ASX share investment is a good idea. Expensive and poor performing investment managers are drains on your potential wealth. Plenty of people just own mature, low-growth businesses like Commonwealth Bank of Australia (ASX: CBA), Telstra Corporation Ltd (ASX: TLS) and Woolworths Group Ltd (ASX: WOW). These probably won’t do much over the 2020s. 

It’s growth that will make the biggest difference. Individual ASX shares like A2 Milk Company Ltd (ASX: A2M), Pushpay Holdings Ltd (ASX: PPH), Brickworks Limited (ASX: BKW), Bubs Australia Ltd (ASX: BUB) and Altium Limited (ASX: ALU) are names that I think could be much bigger businesses in five years.

There are some listed fund managers that I think have a very good strategy. Does their style mean they’re likely to produce strong returns over the long-term? Some ideas are: WAM Microcap Limited (ASX: WMI), MFF Capital Investments Ltd (ASX: MFF), Magellan Global Trust (ASX: MGG) and PM Capital Global Opportunities Fund Ltd (ASX: PGF).

Many millennials find the easiest way to invest in shares on the ASX is in low cost exchange-traded funds (ETFs). Some examples are: BetaShares Australia 200 ETF (ASX: A200), iShares S&P 500 ETF (ASX: IVV) and Vanguard MSCI Index International Shares ETF (ASX: VGS).

How fast could a millennial retire?

I’m not sure how much your finances would be able to invest. But let’s say you make it a big goal in you’re life and you’re able to achieve returns of 10% a month with ASX shares. According to Moneysmart if you were aiming for $1 million in 20 years (to beat your parents) you’d have to invest around $1,325 a month. Obviously if you invested more, or made better returns, then you could return quicker.

I think that’s entirely possible for two-adult household who diligently saved and invested each month.

More reading

• Should you invest in ASX shares for income?
• 2 ASX shares for a first-time investor
• Are these China-exposed ASX shares in danger in 2020?
• If you invested $10,000 in the Altium IPO, this is how much you’d have now
• 2 ASX 50 shares to buy for your retirement portfolio

Tristan Harrison owns shares of Altium, Magellan Flagship Fund Ltd, MAGLOBTRST UNITS, PM Capital Global Opportunities Fund Ltd, and WAM MICRO FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of BUBS AUST FPO. The Motley Fool Australia owns shares of and has recommended Brickworks, PUSHPAY FPO NZX, and Telstra Limited. The Motley Fool Australia owns shares of A2 Milk and Altium. The Motley Fool Australia has recommended BUBS AUST FPO and Vanguard MSCI Index International Shares ETF. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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