Report: Retail Store Traffic Decreases More Than 7% During Government Shutdown

The first U.S. government shutdown in 17 years lasted only 16 days but its impact continues, economists say.

The first U.S. government shutdown in 17 years lasted only 16 days but its impact continues, economists say.

Chicago—Think the 16-day U.S. government shutdown and battle over the debt ceiling stalemate is just some political ploy that has little meaning in the “real” world? Think again: the gridlock has had a measureable impact at retail.

According to ShopperTrak, a leading provider of shopper analytics, total retail store shopper traffic during the week of Sept. 29 to Oct. 5 decreased 7.5% compared to the same time period last year. During the week of Oct. 6 to12, foot traffic decreased 7.1% compared to 2012. The Washington, D.C. area saw an even greater decrease: an 11.4% drop in year-over-year shopper traffic the week of Oct. 6 to 12.

Economist Joel Naroff said Thursday that the shutdown shaved some 20% off fourth quarter growth. Other economists estimate that the U.S. economy lost between $12 billion to $24 billion (or as much as $1.5 billion a day) and probably 250,000 jobs.

Retail Must Recoup From Shutdown Effects

Meanwhile on Thursday,  The Bloomberg Consumer Comfort Index fell to its lowest level since March with the share of people predicting economic conditions will get worse falling faster than at any time since the 2008 financial collapse.

Shopper traffic historically drops to seasonal lows in the weeks after Labor Day, but the onset of cooler fall weather, Halloween and early holiday promotions usually bring shoppers back to the stores in October.

“The furlough of hundreds of thousands of federal workers caused an inevitable decline in consumer visits to retail stores in the first half of October,” said ShopperTrak founder Bill Martin. “Wednesday’s agreement, which also authorizes retroactive pay for furloughed federal employees, holds promise for a resurgence in shopper activity. However, we expect that it will take some time and revised strategies for retailers to recover from the impact the government shutdown had on sales and store traffic.”

Even prior to the government shutdown that began on Oct. 1, waning consumer sentiment had triggered a decline in retail store shopper traffic. During the week of Sept. 15 to 21, shopper traffic decreased 4.7% compared to the previous year. The week of Sept. 22 to Sept. 28 saw a 5% traffic decrease compared to 2012.

About ShopperTrak

ShopperTrak is the leading global provider of shopper insights and analytics to improve retail profitability and effectiveness. More than 750 of the world’s leading retail brands have ShopperTrak services deployed in more than 60,000 locations across 90 countries and territories. The Chicago-based company has more than 200 employees, with offices in San Francisco; High Wycombe, England; Dubai, United Arab Emirates; Shenzhen, China; and Helsinki, Finland. www.shoppertrak.com.

 

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