With The Coronavirus Buying Spree Over, Mega-Retailers See Traffic Declines

Before the nation felt the deep impact of statewide and city-enforced coronavirus lockdowns, mega-retailers like Walmart, Costco and Target experienced spikes in traffic levels as Americans rushed out to stock up on household necessities.

But with more Americans now hunkering down full time, those retailers are seeing traffic levels drop off, according to new data from Placer.ai.

"Critically, the benefit that these brands saw in the early days of the coronavirus are being dampened by increasingly strict regulations," Placer.ai's Ethan Chernofsky wrote in a report.

"The major question is whether these brands are seeing a temporary decline driven by customers having already bought the things they need or are they finally experiencing the direct impact of a coronavirus trend that could ultimately impact all sectors?"

Placer.ai, which tracks foot traffic at U.S. retailers, discovered that in the weeks leading up to the crisis, Target, Costco and Walmart experienced double-digit year over year traffic increases.

Costco's traffic was up close to 35% year over year in the second week of March, while Target and Walmart saw gains of 19.2% and 18.4%, respectively, according to Placer.ai.

A large influx of citizens who visited these mega-retailers before entering monthlong quarantines are credited for pushing traffic levels up.

For a time period, some believed grocers and mega-retailers like Costco and Walmart would escape the wrath of the coronavirus since they sell food and other household essentials.

But new data suggests mega-retailers are far from immune.

Traffic at Walmart, Costco and Target dropped by more than 6% year over year in the third week of March, with Target alone down 20%, Placer.ai said.

But some silver linings are to be found in Placer.ai's new data. For starters, traffic numbers in areas like Texas and Arizona appear to show a correlation between retail traffic stability and a lower threat of virus outbreaks.

The late March traffic declines in both states are not as severe and neither are the region's virus outbreaks so far, Placer.ai said.

"The positive here is that the data indicates that as the situation improves, and doesn’t worsen, consumer behavior tends to return to more normal patterns," Chernofsky wrote. "Should this trend hold, it’s a very strong endorsement for those who believe that wider retail activity could quickly return to previous levels should the preventative measures being enacted serve their ultimate goal."

Even if retailers get back to regular traffic levels soon, their properties are likely to take a hit, according to a new RetailMetrics report.

Retail earnings for the first quarter could have fallen by as much as 18.8% year over year, making it the worst quarterly performance in the past 11 years, RetailMetrics noted.

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