Consumer behavior will forever be changed by shelter-in-place

CNBC’s Jim Cramer on Thursday said the stay-at-home economy will be brief, but its effect on society will be eternal.

“The shelter-in-place economy is temporary,” he said on “Mad Money.” “But, at the same time, I’m betting this period will have a lasting impact on consumer behavior.”

The impact can be felt in the way people experience shopping and fun, even as each state has begun efforts to restart their respective economies after two months of economic turmoil caused by the coronavirus pandemic, Cramer said..

“Just remember, even as we reopen for business, the new normal is not the old normal,” Cramer said.

The gaming industry is one industry that will be lifted by the health crisis. With millions of people quarantined at home, many have turned to video games — perhaps for the first time — for entertainment. Some new gamers, many who may have never been introduced to the medium without being locked inside, will stay hooked post-pandemic, he said.

Take-Two Interactive, owner of Rockstar Games and 2K game developers, on Wednesday posted $729 million in revenue for its fiscal fourth-quarter, up 41{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} and smashing Wall Street estimates of $584 million.

The stock, however, sold off almost 6{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} in Thursday’s session as the company suggested an increase in demand was unlikely to be replicated post-pandemic. Still, Cramer projected Take-Two’s future performance will be stronger than previously expected, given the high number of new players and new business during the period.

“The numbers won’t be as strong as they were this past quarter, but I think they’ll be much stronger than they would’ve been without the extended lockdown,” Cramer said. “That means the stock has to be worth more than what it was selling for before Covid-19.”

Cramer added that the pandemic sped up the ongoing decline of America’s shopping centers. The pain felt by shopping mall retailers and tenants translates to challenges for the real estate investment trusts, mall owners and strip mall companies, he said.

Consumers worried about contracting the virus and instigating another outbreak are even more likely to hop on the internet and shop for goods from the safety of their home, he said. There’s no guarantee foot traffic will return to many brick and mortar retailers.

Many businesses have initiated their migration from brick-and-mortar stores to online shops, a plus for companies like Shopify, which outfits companies with e-commerce operations. The company’s COO, Harley Finkelstein, said the retail world of the 2030s is being pulled into the present, the Financial Times reported.

“Most of their tenants haven’t been able to operate since mid-March” and can’t pay rent, Cramer said. “That’s why I think many of these retail-oriented real estate investment trusts are in big trouble.”

“Without a digital strategy, you’re toast,” he said.