Top 3 Business Valuation Insights September 2020

Industries Most Affected by Coronavirus: Despite the reopening of bars and restaurants across the US, off-premise alcohol consumption continues to grow. Total alcohol sales rose 24.1% during the week ending June 2 and increased 26.3% during the COVID-19 time period versus a year ago, according to Nielsen. Beer sales increased 22.1%, wine sales rose 23.8%, and spirits sales grew 35.2% during the week of June 6 versus a year ago.

Courts are weighing in on COVID-19 business interruption claims: The case is Gavrilides Management Company v. Michigan Ins. Co. A Michigan court dismissed a restaurant owner’s suit against the insurance company that had denied coverage after he argued the state government’s mandated shutdown had caused him to lose the use of his property and by extension profits. Generally speaking, to qualify for business interruption damages, a business owner must show physical damage to the property. The insurance company prevailed because the plaintiff failed to show that COVID-19 actually damaged the physical integrity of the property, the court found.

Economic update: Small-business optimism: Sixty-five percent (65%) of respondents felt very or somewhat good about their current financial situation, and 67% felt more optimistic than pessimistic about their financial outlook. E-commerce retail sales surged by 31.8% in the second quarter of 2020 when compared to the first quarter of 2020. Total retail sales rose for the third consecutive month in July, rising by 1.2%, after an increase of 8.4% in June. In July, the unemployment rate improved for the third consecutive month, coming in at 10.2%, for an improvement of 0.9 percentage point. Consumer prices, as measured by the Consumer Price Index, increased 0.6% in July, matching the rise from June. The housing data in July showed that construction of U.S. homes continued to soar, rising by 22.6%. Existing-home sales continued to rise at a record pace, increasing 24.7% in July, after a rise of 20.7% in June.