Retail Roundup: Analyzing The Latest Traffic Numbers

Perhaps it’s no surprise: The latest retail traffic data indicate that store traffic is continuing its downward trend.

December’s third-week traffic was down 12.3 percent year-over-year — even worse than the prior week’s drop of 10.1 percent.

While the deceleration was indeed greater, for at least the last quarter, the explanations for the slump have not changed much.

Cowen & Co.’s retail team had estimated that traffic would decline a much more modest 2 percent to 4 percent, but the analysts suggest that ongoing issues — inventory overages, warmer-than-usual temperatures and changing consumer-spending patterns — have proven more damaging than initially feared.

“Given that December’s month-to-date traffic [is down] 10.2 percent year-over-year, we believe retailers are grappling with excess inventory — especially apparel — and [we] expect the environment to remain highly promotional through January,” the report said.

On a two-year stack, traffic was down 21.9 percent last week, compared with a decline of 13.1 percent in the previous week.

Weather was again a major player, said Citi Research analysts Kate McShane and Corinna Van der Ghinst.

“Several storms in the Northwest resulted in the third-wettest third week of December in 24-plus years,” McShane and Van der Ghinst noted. “As a whole, the third week of December was also the second warmest in 24-pus years.”

What’s worse, Cowen’s team pointed out, traffic on the last Saturday before Christmas alone, also known as “super Saturday,” was down 8.44 percent year-over-year.

Despite the dismal the brick-and-mortar data, McShane wrote on Dec. 21, shopping centers are “still in style” and should remain that way for some time.

According to a survey published by the International Council of Shopping Centers (ICSC) and referenced by McShane, 83 percent of consumers visit a shopping center at least once a week. An even greater share of weekly mall visitors — 92 percent — are in the 18-24 year-old age demographic.

“Such a high percentage for younger, more online-oriented consumers should be a positive, as it supports the view that centers have evolved into more than retail destinations, with dining/entertainment options creating a unique experience that is social and differentiated from online,” McShane wrote. “Retailer focus on offering alternatives to overnight/same-day shipping, such as ‘Buy Online, Pick Up In Store’ appear to be well-received, with the survey reporting that 34 percent of shoppers utilized them over Thanksgiving and Black Friday.”

For retailers and brands that continue to struggle with navigating the increasingly treacherous retail landscape, check out Three Things Brands & Retailers Can Do To Manage The Retail Slowdown.

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