Looking only at the data for the first two months of 2020, you might have been tempted to declare — and not without good reason — that it was shaping up to be a banner year for brick-and-mortar retailers. In the last week of February, national in-store traffic was up 3.5% compared to the previous year. California’s walk-in numbers were just a hair below the 2019 figures during that same period, hovering in the 97%-99% range. The U.S. had experienced 23 consecutive quarters of GDP growth, one of the longest such periods in modern history. It felt to many like there was nothing that could cool down America’s red-hot economy.
And then, beginning in early March, the bottom fell out. As the novel coronavirus outbreak proliferated across the country and around the world (and as state and local governments wrestled with how to control it), foot traffic dropped precipitously across the board. By the end of the month, nationwide retail walk-ins were at a paltry 27.1% of the previous year’s figures. California didn’t fare much better, with foot traffic falling to 30.3% at month’s end. Furthermore, both California and the U.S. as a whole hit foot traffic low points in mid-April, with walk-ins at a mere 26.1% and 25.2%, respectively.
One particularly interesting insight we’ve gleaned from our data is that this steep decline in retail foot traffic began well before most states had issued shelter-in-place orders. For context, only eight states had implemented quarantine orders by March 23, and yet nationwide walk-ins had already dropped by 59.7% from the level they were just two weeks prior. California experienced a nearly identical drop of 58.8% in that same span.
This early decline was likely due (at least in part) to the fact that some of the earliest states to issue shelter-in-place orders were also among the most populous. In addition to California (#1 in terms of population), New York (#4), Illinois (#6) and Ohio (#7) were also among the first eight states to close down. However, that explanation does not tell the full story. Consumer concerns about sanitation and safety almost certainly played a role as well.
So what does all this information tell us? When can we expect consumer foot traffic to get back to a level we could consider normal in California?
September 19. Let’s dig into the data.
Elaine Brubacher, a 79-year-old retiree living in Southern California, has explicitly altered her shopping habits during the pandemic. Prior to the spread of COVID-19, she would generally go shopping twice a week. Now, she says simply, “I don’t go out.” Brubacher has limited her shopping trips to once every ten days, and even then, only for the necessities. “I’m not doing any shopping other than what is absolutely necessary — the grocery store or the pharmacy. I’m not comfortable with “general shopping.”
Brubacher is certainly not alone in her desire to avoid crowds. With more than 120,000 deaths from COVID-19 now confirmed, consumer concerns about the possibility of catching or spreading the coronavirus by way of social contact are as high as they’ve ever been. Though many merchants have taken measures to make their locations safer for workers and shoppers alike — installing partitions at checkout counters, sanitizing pens and shopping carts, limiting entry to a fraction of capacity — a great many would-be patrons are still wary of being in close proximity to others.
Foot traffic in California and the country at large hit their lowest points on April 18. Since then, we have seen foot traffic slowly but steadily climb to 50.6% nationwide — and eight consecutive weeks of steady recovery bodes well for a reasonably quick return to normal, especially now that states have begun relaxing quarantine measures.
The nationwide data alone, however, doesn’t show the full picture. While the rate of the initial retail foot traffic decline was similar across states, the rate of the rebound, by contrast, varies widely by state and locality.
Different states — and independently, a large number of municipalities and counties within the states — imposed and lifted their quarantine orders at different points in time. This means that some states and localities experienced longer shelter-in-place periods than others — in some cases, by a margin of several weeks.
States that closed late and opened early — like Arizona, Florida, Georgia and Texas; let’s refer to them as the Optimistic States — experienced a less significant impact on the retail sector. Like the nation at large, these states saw their lowest foot traffic numbers in mid-April. However, walk-ins in all of these states have now rebounded to above 50% of normal. On average, these four Optimistic States spent just 32 days in lockdown and experienced 63 days of sub-50% retail traffic. For comparison, the national average for sub-50% traffic days is 88. Georgia, which had the shortest lockdown timeline in the country, spent just 22 days in quarantine and had only 55 days of sub-50% foot traffic.
Contrast those numbers with states that acted quickly to enact shelter-in-place orders and which have shown more caution in reopening — like California, Hawaii, New Jersey and New York; let’s call these the Cautious States. These states have seen a much smaller bump in in-store activity. We are seeing modest increases in foot traffic as they slowly reopen, but most are still under 50% of what would be considered normal for this time of year. On average, these Cautious States spent 58.5 days in lockdown and have experienced 95 days (and counting) of sub-50% retail traffic.
California, which was the very first state to implement a stay-at-home order on March 19, has been hit particularly hard. The state’s shelter-in-place order lasted 54 days, and California has remained at below 50% normal foot traffic since March 21 — a period of nearly 100 days. Clearly, the impact of COVID-19 on walk-ins has not been the same across the country.
If current trends hold, our data forecasting models predict a return to 2019 levels of foot traffic sometime in September: September 6 for the U.S. at large, and the 19th for California in particular.
This model is essentially a linear extrapolation of current trends and assumes no further shelter-in-place restrictions. That assumption, of course, is not guaranteed. The Optimistic States are already seeing the number of COVID-19 cases spike massively as they’ve opened back up over the past several weeks. Twelve states, including each of the four Optimistic States we analyzed above, have hit record highs in new coronavirus cases since June 19.
The Optimistic States are not the only ones seeing these increases. While New York and New Jersey have seen new cases decline, California has seen a record number of cases recently. Further, California has also recently been declared a hotspot for infections of younger people between the ages of 20 and 30.
So while policymakers and public health officials race to develop the best plan to balance the desire to contain the virus with the need to reopen the economy, it seems as though we can draw a couple of conclusions: (1) there is a strong correlation between shelter-in-place order duration and negative impact on retail foot traffic, and (2) even with the lifting of these orders, consumers are not flocking back to stores quickly. The return to normalized in-store traffic in California will take months.