A variation on “out of sight, out of mind,” is being played in malls across the U.S., and its theme is simple: People aren’t going to stores as often as they used to, and it’s impacting retail sales in a major way.
In its most recent report on physical store traffic in the U.S., big data firm RetailNext reported that retail footfall has declined each month in the last two years, as increased shopping options like e-commerce and mobile commerce allow consumers to go to the mall less frequently.
Retail sales at physical stores has also been falling, down by between 6 percent and 11 percent in each of the past six months.
Many retail analysts have tried to explain away the phenomenon, even going so far as to say that declining store traffic has minimal effect on retail sales because shoppers make fewer trips to stores for a given transaction, preferring to research their needs online before leaving home, making the rarer store visit a more purposeful one.
Although that might have been the case for several months in early 2015, the numbers no longer seem to bear that out.
Over the past four months, sales per shopper at physical stores has been flat to down, while footfall has continued to drop at a high-single-digit rate, as illustrated in the chart below.