Digging Deeper into Retail's Recovery

Despite the major wallop that was unleashed by the pandemic, retail continues to be about location, location, location. As a result, retail’s recovery has varied widely in the past several months for many reasons but primarily because of where the store is located.

Placer.ai recently examined the retail space to pinpoint how the recovery unfolded toward the end of 2020. Since mid-June, overall retail visits were down between 11% and 15%. And while this number seems relatively strong, it is buoyed by the improved performances of sectors such as home improvement and grocery.

Another key takeaway is the wider retail landscape was posting steady improvements heading into the holiday season, prior to the resurgence of COVID cases in November.

However, during the week of November 23 which included Thanksgiving and Black Friday weekend, visits were down 25% for the overall retail sector. This represented a step back following several weeks of improvement heading into this key retail weekend. This backslide in what was otherwise a steady recovery stream was especially problematic in terms of timing.

Regional Perspective

But throughout the pandemic, outcomes have not been uniform across the country due to stricter gathering restrictions in some states. For Louisiana, overall retail visits were down just 2.5% year-over-year during the week beginning November 30. Yet, in California, a key state where many retailers have the largest number of locations but stronger restrictions, visits were down 20% year-over-year in the same week. In other significant retail states such as Texas, New York and Florida, overall retail visits were down 12.5%, 12.9% and 10% respectively year-over-year during that week.

Sector Positioning

Another area where a lack of uniformity has been even more significant is within different retail subsectors. Weekly visits from the week of October 19 through the week beginning November 30 point to stark differences. While weekly visits to the wider apparel sector were down an average of 25% during that period, the dining sector had an average visit decline of 32%. On the other hand, the grocery space including hard-hit brands such as Whole Foods had an overall average decline of just 2% during that timeframe. At the same time, the home improvement sector had an average year-over-year increase of 11%.

Why does this matter/? A more widespread perspective on the retail landscape can point to several critical factors.

First, it establishes a benchmark to which brands across specific sectors can be compared. Second, it provides a better sense of the overall effect, including the obvious takeaway that brick-and-mortar retail is still very much a fundamental piece of the puzzle. Quite simply, in-person retail is not dead. It faced the worst possible combination of events and continued to post massive visit numbers in some areas.

A final valuable component is the differentiation between the unique challenges facing brands within specific regions or sectors. Recognizing factors such as varied regional distribution can help contextualize performance, providing valuable indicators about which brands could bounce back most quickly.