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Wholesale & Mass Merchandise Update

by 
Ethan Chernofsky
 on 
April 14, 2020
Wholesale & Mass Merchandise Update

Following initial surges in traffic, the Wholesale and Mass Merchandise sectors saw visits decline to levels significantly lower than their norm. Yet, much of these drops have been self-imposed, with Costco, Walmart and Target all imposing restrictions on in-store traffic. 

Can these brands reach their earlier peaks? How are they positioned for the longer term? We dove into the data to find out.

Drops Are Leveling Off

While all four brands saw significant growth in the early weeks of the crisis, the peak clearly came in the second week of March. While the visit decreases seemed to pick up pace in the last two weeks of March, data from the first week of April shows that these drops seem to be leveling off. 

Walmart traffic decreased by 1.1% between the last week of March and the first week of April, while Target and Costco saw drops of 2.5% and 3.3% respectively. Of the four, only Sam’s Club saw a nationwide increase of 5.6%. The relative stability indicates that a new floor may have been found for these brands, and while it is certainly lower than the norm, it does show the unique power and position of these companies that the pace decline is not continuing. 

Signs of a Quick Return?

This stability, alongside some relatively strong days amidst the crisis does show a high likelihood that these brands will be among the first to return to normal levels. Looking at Walmart traffic, visits on Friday, April 3rd, actually grew by 3.7% compared to the previous Friday, though Saturday and Sunday traffic declined.

Costco continued to see minor drops in traffic, though the pace of these declines leveled off dramatically potentially creating a new normal for in-store traffic.

Regional Differences

Another factor to consider is the regional breakdowns of the traffic patterns, as these could indicate changing processes in different areas of the country. Looking at Costco traffic in New York, Arizona, Florida and Texas showed a significant slow down across the board. Stable traffic was seen in some of the harder-hit states, while places less effected like Arizona, felt the voluntary restrictions Costco had implemented.

But, Walmart data may be the most demonstrative of a potential turning point felt in late March. Visits in New York and Florida, two of the most affected states, saw actual week-over-week growth in early April. Should this pattern hold it could indicate a floor to the ‘bottom’ being felt by the brand in different regions. 

Takeaways

The Wholesale and Mass Merchandise sectors have been among the strongest retail performers during the COVID-19 pandemic. Yet, recent weeks have hit the sectors hard through a combination of self-imposed restrictions and stricter social distancing measures. 

Yet, there are reasons for cautious optimism. Declines have leveled off significantly, and in some areas, there has even been growth week over week. This certainly doesn’t mean that a return to full retail normalcy is around the corner, but should more stable patterns hold, we may have a sense of the floor brands like this will experience. 

Check back in with Placer.ai for more information. 

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