The United States has become a new epicenter of the coronavirus pandemic. And, New York is considered one of the biggest hot spots, as confirmed cases continue to grow. It’s obvious that the spread of the virus is impacting the entire country and economy, but it's even more apparent that businesses are taking a much more significant hit in areas where the virus has hit the hardest. So, we dove into New York to see just how severe the damage has been thus far.
Travel Takes a Hit
With travel at a standstill, it’s not shocking that John F. Kennedy and LaGuardia airports have taken significant hits in traffic since the beginning of March. Both are considered hubs and are popular for international and domestic layovers. When we look at the period of January 2019 through March 22nd, 2020 and analyze year-over-year traffic for the first three weeks of March, we see massive decreases. JFK and LaGuardia both showed significant declines of 71.9% and 79.9% respectively, reflecting ever-increasing restrictions and more pervasive social distancing by travelers.
Incredibly, when looking back at the first week of March for both airports, we see declines at 28.1% and 22.6%, what seemed like massive declines. But, these pale in comparison with the most recent data. With travel bans still in effect for a majority of the world, these airports will continue to see tough numbers throughout the coming weeks and months.
Drastic Declines for Retail
The wider retail sector has been heavily affected due to the closures of the malls and shopping centers that house them. When we looked at two of New York state’s larger malls the declines were enormous. The first week of March 2020, The Palisades dropped 14.6% from the equivalent week in 2019 while Destiny USA showed a slight decline of 3.0%. But, we see more drastic results when we head into the second week of the month. Visits for both Palisades and Destiny USA declined 40.1% and 27.1% respectively. The third week recorded the most severe results with malls actually shuttering during this period.
Unfortunately, malls will ultimately see traffic come to a complete stop, as New York imposes new restrictions across the state. But, with every shutdown, comes the eventual reopening, so it’s imperative for these malls to have rebound strategies in place.
Parks Plummet
New York has some of the most beautiful parks in the world, but they aren’t off-limits when it comes to traffic declines. Washington Square Park and The High Line in New York City are two of the most popular destinations for both locals and visitors, but as stay-at-home orders come into effect, we see visits declining drastically.
When we take a look at the first week of March, we see a promising outcome, with Washington Square Park and The High Line both recording positive year-over-year growth at 25.5% and 11.6% respectively. Even though the virus was evident in the city during the time, New Yorkers were still getting fresh air while they were still allowed. When we look at the second week of March, we see visits for both locations plummet. Traffic to Washington Square Park declined 37.8% while The High Line recorded a more drastic decrease of 47.1%.
But, although extremely significant, the numbers for the third week of March shouldn’t come as a surprise, as the city is now on full lockdown. With the closure of universities and business impacting traffic to both locations, it is unlikely visits will return to normal levels until a steady sense of normalcy returns.
Wholesale Struggles, while Supermarkets Stay Strong
While the wholesale industry has dropped from its massive nationwide peak, it’s taken a more significant hit in New York, as well as other largely impacted states. While Costco showed promise for the first two weeks of March, year-over-year visits declined nearly 10.0% during the third week of the month - a significantly greater drop than less hard-hit states. But, while almost everything in New York is on a seemingly drastic decline, one potential bright spot is the supermarket.
We looked at three grocery chains in New York, ShopRite, Wegmans and Whole Foods to see what their performance might indicate. ShopRite saw positive year-over-year growth for the first, second and third week of March. Impressively, even when most New Yorkers were ordered to stay at home during the third week of March, ShopRite still saw a 17.9% traffic increase.
Additionally, if we compare the baseline average from January 2019 to March 22nd, 2020 we see visits jump 17.2% year-over-year when visits were 3.9% below the baseline for the period. The success is all the more important when looking at the wider grocery space.
Wegmans, another popular supermarket, saw a year-over-year decrease in the third week of March following two weeks of significant statewide and national growth. In the third week of March 2020, the retailer saw visits that were 7.5% below the baseline, a 5.9% decrease when compared to the equivalent week in 2019.
Yet, this decrease demands context. The impact in the state is largely affected by the wide stock available at Wegmans, something that could have pushed customers to stock up for a longer than normal period. And, the drop can even be seen as a success when looking at other grocery players in the state. When looking at year-over-year visits to Whole Foods locations in New York for the third week of March, we see a drastic decline in 2020. Visits for that week were 38.3% below the baseline average, compared to the previous year when they were 0.7% below, a 37.6% decrease.
The impact here is enormous, especially compared to other NY grocers. The heavy focus of Whole Foods on major cities is clearly having a significant impact on performance, as these highly populated areas have been hardest hit. But, it also speaks to the unique dependencies and strengths each brand is showing during this period. Whether it be ShopRite’s peaks, the steady performance of Wegmans or the lows Whole Foods is experiencing, there are critical takeaways for each brand. The ability to identify certain weaknesses or to develop complementary strengths could help them outperform in the long term.
Takeaways
Visits are more likely to continue and be steeper in areas that are more significantly impacted. And, as the virus spreads, there are strong indications that the local impact will be far more severe. But there are critical lessons for many brands to learn now so that the ultimate rebound can be as quick and effective as possible.
Stay up to date at Placer.ai.
.png)
