As vaccination rates increase and infections decrease in the United States, the retail industry eagerly anticipates the return of shoppers in physical stores. But it remains unclear how the pandemic has permanently shifted consumer behaviour, and what kind of shopping experiences will draw in-person crowds.
The recovery this spring has been uneven, with spending surging after the US government sent stimulus checks to many Americans. But foot traffic remains significantly below levels seen in the same period in 2019.
Foot traffic in retail declined again in April compared to 2019, according to data from analytics firm Placer.ai. But its data also showed that the recovery was being driven by shoppers in New York and California, both of which have yet to fully reopen, indicating a potentially larger appetite to shop in stores as consumers feel more comfortable about health precautions.
Moody’s is also optimistic. In early May, the credit rating service revised its outlook for the US apparel and retail sector to positive versus stable.
But the recovery will not be evenly felt across the industry. Retailers that performed well during the pandemic, like Ulta Beauty, are seeing better traffic than in 2019, according to Placer.ai. And value-driven retailers like T.J. Maxx, which still offer shoppers a bargain experience that is not yet easily replicated online, are also seeing traffic surges after a year of store closures.
Department stores are struggling, with Nordstrom, Macy’s and Bloomingdales among the retailers still down from pre-pandemic traffic levels, though improved from February.
In May, Macy’s raised its guidance for full-year revenue based on the increased store sales it saw in the first quarter of the year, but it is still aiming to deliver 2021 revenue of at least $4 billion less than in 2019.
Mall stalemates L Brands, Macy’s and Gap are seeing their stock prices recover after sharp declines in the early months of 2020 — a sign investors are optimistic about the future of the category.
The three charts below show retail’s uneven recovery.