Throughout 2008, the American shopper has endured record high gasoline prices, hurricanes and flooding, and a stalled housing market in their quest to shop. But evidence suggests they are no longer inclined to shop until they drop.
While the consumer has remained fairly resilient during this time, two very recent events are dramatically impacting mall visits and consumer confidence.
According to ShopperTrak RCT, a provider of retail intelligence information, the upcoming election and recent financial meltdown are keeping shoppers at home rather than their favorite malls -- a pattern retailers are hoping improves heading into the critical holiday season.
Still, while consumer confidence is shaken, ShopperTrak notes that declining mall traffic during an election year is somewhat expected.
An analysis of enclosed mall shopper traffic patterns during the last three national elections revels that shopping activity tends to lessen as Election Day approaches and shoppers focus on the election and its results.
In 2002 the country was in a recession, and the Dow Jones Industrial Average and the S&P; 500 Index were both hovering near record lows during election season. According to ShopperTrak:
• Enclosed mall traffic averaged a 2.8 percent year-over-year decline each week in the month preceding the 2002 election.
• During election week, traffic declined 2.4 percent as compared with 2001.
• In the weeks following the 2002 election, enclosed mall traffic remained in the doldrums, averaging a 3.9 percent year-over-year decrease all the way through the holiday shopping season.
In the 2004 presidential election, as the country was in the midst of an economic recovery, traffic numbers fared slightly better, but still trended down during election week and showed just a moderate increase in the weeks following the election:
• Enclosed mall traffic averaged a 1.5 percent (per week) year-over-year gain in the month preceding the election.
• During election week, traffic declined 2.4 percent as compared to 2003.
• In the weeks following the election and throughout the holiday season, enclosed mall traffic averaged a 0.8 percent (per week) year-over-year increase.
Finally, when looking at our last national election in 2006 -- which preceded the most recent rise in energy prices and the uncertainty in the financial markets -- enclosed mall traffic fared quite similarly to 2004:
• Enclosed mall traffic averaged a 1.2 percent (per week) year-over-year gain in the month preceding the election.
• During election week, traffic declined 0.7 percent compared with 2005.
• In the weeks following the election and throughout the holiday season, enclosed mall traffic averaged a 0.4 percent (per week) year-over-year increase.
According to ShopperTrak co-founder Bill Martin, the 2008 presidential election season most resembles both the economic conditions and holiday calendar seen in 2002, which could indicate a steady traffic decline this year.
"We anticipate malls and stores will experience a noticeable decline in shopper traffic during the upcoming election season as shoppers focus on both the election and the poor state of the economy," said Martin. "In addition, without any positive economic news, we expect declines in traffic throughout the holiday season -- an event which drew over 9.66 billion shopper visits to retail stores and malls in the United States last year. So, based on this, even a 1 percent drop in traffic could mean 96.5 million fewer visits to stores and malls in 2008."