Consumers took a furlough from shopping during the U.S. government’s 16-day shutdown.
This story first appeared in the October 21, 2013 issue of WWD. Subscribe Today.
Figures from retail traffic counter ShopperTrak revealed a 7.5 percent decline in foot traffic from prior-year levels during the seven days beginning Sept. 29, two days before the inability of Congress to pass a budget led to the first government shutdown in 17 years.
The drop in shopping activity was somewhat less marked during the second week of the partial closure of the government, with foot traffic down 7.1 percent in the week ended Oct. 12. The year-over-year decline in the Washington market, home to many of the approximately 800,000 federal employees furloughed during the shutdown, stretched to double digits, with traffic off about 11.4 percent in the area during the second week of the month.
Anticipation of the shutdown appears to have contributed to weak consumer demand in the weeks preceding the shutdown as well. Traffic was off 4.7 percent during the week ended Sept. 21 and down 5 percent in the week ended Sept. 28.
Shopper counts historically have fallen in the weeks after Labor Day, but ShopperTrak anticipated a bit of a pick-up in the run-up to Halloween and with the arrival of cooler weather.
Bill Martin, founder of Chicago-based ShopperTrak, noted that the agreement to reopen the government and raise the debt ceiling, reached late Wednesday, “holds promise for a resurgence in shopper activity. However, we expect that it will take some time and revised strategy for retailers to recover from the impact the government shutdown had on sales and store traffic.”
ShopperTrak in September forecast sales growth of 2.4 percent during the November-December holiday selling period despite an anticipated 1.4 percent decline in traffic.
In addition to weak demand, retailers will be pressured by a short selling season between Thanksgiving and Christmas, and an early start for Hanukkah on Nov. 27, the day before Thanksgiving.