Coca-Cola CEO, "Economic Impact of COVID-19 Just Beginning...Concerns Over Prolonged 'U-Shaped' Recovery"

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Hyunwoo Lee] James Quincey, CEO of Coca-Cola, the world's largest beverage brand, has expressed a pessimistic outlook, stating that the economic impact of the novel coronavirus infection (COVID-19) has only just begun and that economic recovery will require much more time than expected. He analyzed that the large-scale unemployment crisis and the resulting contraction in consumption could last longer than anticipated.

In an interview with CNBC on the 20th (local time), CEO Quincey said, "The economic impact of the COVID-19 lockdown measures is only just beginning," and added, "Rather than a rapid V-shaped recovery to pre-crisis levels, an extended U-shaped recovery with a much longer recovery period is expected." He further explained, "It is still too early to measure how consumer spending will change following the lifting of COVID-19 lockdowns, but generally, consumers will focus more on holding cash than on spending."

According to CEO Quincey, Coca-Cola's revenue fell sharply by 25% last month, and sales are still recording a year-on-year decline this month. Half of Coca-Cola's revenue comes from restaurants, movie theaters, and stadiums, but due to the prolonged lockdown measures, sales have been slow to recover. Demand in China, where lockdowns were lifted starting in April, has also not yet returned to pre-crisis levels.

In the United States, more than 36 million Americans have applied for unemployment benefits since the COVID-19 outbreak, and the Congressional Budget Office has announced that the U.S. GDP could drop by 38% in the second quarter.

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