The second week of April continued to see sluggish retail traffic as cooler temperatures, among other things, kept shoppers at bay.
According to reports by Citi Research analyst Kate McShane and Cowen and Co. analyst John Kernan, total U.S. retail visits for the week ended April 16 declined 6.58 percent year over year. Total U.S. retail same-store traffic slid 8.75 percent year-over-year for the week while year-to-date retail visits are down 3.4 percent. (McShane cites ShopperTrak’s Market Intelligence product as her data source.)
Although traffic can dip in mid-April following the Easter holiday rush and as people wait for the weather to fully transition to warmer temperatures — total U.S. retail visits were down 20.72 percent during the same week last year — there are several factors that are taking their toll on retail this year.
Cowen and Co. released a report today that outlined some of those variables. Here, we round up three key factors from the report.
E-commerce and Mobile Growth
Holiday e-commerce sales gained 13 percent to 14 percent while mobile captures 61 percent of consumer’s digital shopping time, according to the Cowen report.
Several big retailers — Pacific Sunwear, City Sports, Sports Authority, American Apparel, Eastern Mountain Sports, Bob’s Stores and Sport Chalet — have filed for bankruptcy in recent months and pressure to maintain a brick-and-mortar presence as well as increased competition from e-commerce have both been posited as contributing factors. (The parent company of Eastern Mountain Sports, Bob’s Stores and Sport Chalet — Vestis Retail Group LLC — filed for bankruptcy on April 18.)
Lack of Trends
Or “product malaise,” as Cowen and Co. termed it, continues to plague retailers. Depending on who you ask, either consumers are simply not interested in purchasing “stuff” these days or brands and retailers are not creating/offering enough fresh and exciting product in order to compel consumers to buy.
The truth is, it’s probably a combination of both. An Instagram and Snapchat-oriented culture has led many consumers to opt for travel and experiences that make for more like–worthy social media posts as opposed to purchasing shoes and apparel. Meanwhile, research continues to show that when people find a product that they really like, they will buy it.
U.S. Presidential Election Creates Uncertainty
Retailers have notoriously blamed sluggish traffic and sales during an election year on the uncertainty and hype surrounding a presidential election.
In addition to the attention that the campaigns and debates tend to draw — which may take away from retail shopping — high-end shoppers in particular may scale down their spending ahead of the election if they fear the next president will raise tax rates for the wealthy, according to Cowen and Co.