Traffic Surges in Some Sectors, but Year-Over-Year Trends Dismal
As many more states plan to reopen in some capacity, the data from those that took the lead is not exactly encouraging.
Data from analytics firm Black Box Intelligence (formerly TDn2K), traffic analysis and surveying firm Sense360, and marketing and loyalty firm Fivestars shows even weeks into reopening, there has been extremely uneven traffic patterns.
The one bright spot, it seems, is retail apparel. According to Fivestars, clothing sales in Florida rocketed upward by more than 1,000 percent in the first week after the state reopened most businesses on May 8. And it grew another 39 percent in the following week.
“We’ve seen a greater rebound in retail as opposed to others. Then salon and spa, which you would think would recover faster because there is that pent-up demand,” said Chris Luo, senior vice president of marketing at Fivestars. “Obviously, you can speculate about the concern of being around people and all the salon and spa owns figuring out how to navigate that.”
According to Sense360, residents in reopened states were acutely aware that retail had opened. In a survey of about 600 consumers in recently opened states, 57 percent of respondents said they were aware that non-restaurant retail were allowed to reopen. More (61 percent) were aware that salons had reopened, but it’s one of the mismatches between awareness, pent-up demand and low sales and traffic.
During the second week after opening, Arizona saw an 85 percent bump in sales among beauty and spa, and Florida saw a whopping 498 percent jump; Texas saw a 53 percent bump in Fivestar data that covers more than 14,000 small businesses. All states, however, were still down year over year. Arizona was still down 34 percent; Florida was down 87 percent and Texas was down 54 percent. Georgia, which opened first, had a sales increase in the salon and spa segment bump up 5 percent last week, but it’s still down 69 percent, suggesting that there may be week-over-week sales increases initially, but the pent-up demand fades.
One of the most watched sectors is restaurants, and sales and traffic data there is not encouraging for business owners hoping for some return to normal. In Fivestars data, restaurants saw a small bump in sales but were still down drastically. Florida saw a 6 percent bump in the first opened week, but was down 70 percent compared to last year; Texas bumped up 9 percent, but remained 79 percent lower; Georgia jumped 22 percent, but was still down 72 percent; and California ticked up 6 percent, but remained down 72 percent overall.
Arizona had some of the best results in its first full week open, as sales rose 16 percent and were only down 54 percent year over year. In the second week open for the initial states, the trends mostly continued. Florida restaurant sales were up 9 percent, Georgia was up 13 percent, Texas slowed to 4 percent growth and California slowed to 2 percent growth in Fivestar data. Luo said many of their clients are in the fast-casual world, and according to Black Box, casual dining was still dismal.
According to the latest data from the analytics firm, dine-in comparable sales were still down 95 percent year over year, though recent sales represented “almost 20 percentage points better than mid-April.” Limited service performed better, marking two weeks of positive comparable sales growth, down only 6.5 percent in the week ending May 10. Dine-in did fare better in reopened or states that didn’t see major shutdowns. Montana, North Dakota, Utah, Oklahoma, Tennessee, Georgia, Texas and Florida had casual dining comp sales declines of 34 percent compared to the rest of the country, which was down 52 percent.
For those that are reopened, the ongoing capacity restrictions may come into play, but even those states don’t see sales reaching even the limited capacity. That means consumers are not ready to return.
“I have not seen significant differences in recovery of restaurants for states like Texas and Florida that have the 25 percent restriction compared to Georgia at 50 percent. That’s why I think there’s a consumer demand sentiment. Regardless what they open at, if you're hesitant, you’re hesitant and that will reduce demand across the board,” said Luo.
That sentiment was borne out in Sense360 survey data, which saw major shifts in consumer behavior even in open states. In a survey of consumers in those states, 49 percent of respondents said they were not convinced it was safe to dine at a restaurant yet—28 percent said their budget was tight and 25 percent said they hadn’t had a special occasion yet. And 17 percent said that home cooking had become a new habit that they appreciated more than dining i. Six percent said delivery and takeout had become a preferred choice to dining in.
In all, a large portion of regular dine-in consumers are not ready to go back for one reason or another.
“Even those who were regular users in all of these cases, it’s one in three people have since returned even though they are aware restaurants are reopened and they regularly visited them,” said Andrew Custage, head of analytics at Sense360. “So, people are still shying away even though they are aware they are open.”
In the survey data, just 22 percent of people who visited regularly prior to COVID-19 have gone back. Just one in six of the small group of people who said they had returned said they felt the government policy of reopening validated the safety of eating in a restaurant.