With all the adults over 16 now being eligible for COVID-19 vaccines, the U.S. is on track to vaccinate 70% of its population by mid to late June. The vaccination pace has been significantly increased on a weekly basis since the start back in the second half of December 2020, hitting now an average of over 3mm Americans getting vaccinated daily.
In regards to the new COVID-19 cases, after the recent drop from the pick in January new cases have been plateaued, and most recently have started to tick up a bit.
According to the New York Times, 40% of the US population has been inoculated. Using cellphone location data we wanted to examine whether the vaccination program has resulted in behavioral changes of the population in terms of returning to their pre pandemic footfall habits.
Using our proprietary data for hospital admissions, we see that there’s been a downtrend in people hospitalized for more than 3 days. More specifically, short-stay hospitalizations (1 to 3 days) spiked in early January and started to slow down in late January following a slight reversal after then. It is worth noting that many hospitals have now restarted elective procedures. For longer hospitalizations, those from 4 to 7 days, the story is different; they don’t appear to be fluctuating materially. The pattern seems to be similar for long-stay hospitalizations (over 8 days); they are slightly over from the previous bucket (4-7 days) but have been steadily decreasing over time.
Longer-stay hospitalizations are significantly lower compared to hospitalizations from 1 to 3 days? A plausible explanation is that senior people, who made the majority of COVID hospitalizations now over 75% vaccinated, it does prove the vaccines are working.
Looking at our macro footfall indices, we observe more people travelling and going out in general . Americans are now driving 47% more than they did at the beginning of the year. Traffic to hotels is 52% up since late March while restaurants traffic is up 17%.
We will keep monitoring the traffic trends as the country is reopening but so far most of our footfall indicators are encouraging we are approaching normalcy.
After a year of virus-related travel restrictions and with Covid vaccinations picking up steam nationwide, Americans are feeling more comfortable to get out of town, fact that is causing a surge in post-vaccination travel. Using our proprietary geolocation data, we can see the sudden increase in travel-related indexes, a sign that consumers are ready to travel again.
US airlines reported an increase in airfare activity as restrictions started to ease more across states. Looking at the US airports, the traffic dropped -41% in late January and progressively increased to +40% in early April compared to the week between 12/29/2020 and 1/4/2021.
For the Americans that chose to drive instead, we saw an increase in our Miles Driven index of over 40% since early February hitting up to 60% in recent days.
For the car rental companies, the story is somehow different. Big companies in the US such as Avis and Hertz forced to sell a huge amount of their vehicles to survive the pandemic. Especially for Hertz, this movement secured some much-needed liquidity since the company filed for Chapter 11 bankruptcy in the first months of the pandemic. However, the demand for rentals has increased over the last two months to the extent that it cannot keep up with the current inventory.
Rental car companies are doing everything in their capacity to cope with the recent surge in demand, but this may take a while until they can procure new cars primarily due to the chip shortages which led car manufactures to halt the production – read our blog about semiconductor shortages
Following the recent news that Ford is expected to halt production for two weeks in April due to chip shortages, and given our recent study on this exact subject few months back we wanted to take a closer look and quantify how the largest US carmakers and the industry as a whole is currently affected. Employee counts are often times the right metric produced by our foot traffic data to analyze industrial companies. Looking at the employee traffic at the US plants for the three major carmakers it is clear that we are consistently for the last seven or so months at subdued levels of production, with March being the first month showing al recovery.
What is also worth pointing out is that each manufacture has its own path to optimal production rates and these could vary by month as shown on the graph below. Worth highlighting Ford has been consistently producing more than Fiat post the covid-19 recovery, even though this wasn’t the case before.
Looking at the same employee counts but at a YoY basis (graph below) it is clear that all manufacturers are similarly affected for the most part in 2021. Having said that a YoY analysis might not be the best in this case especially for the first three months of 2021.
Focusing on 2021 production though by only looking on month over month changes for the same employee foot traffic, we can get a clearer picture on how things differentiate between the manufacturers. March was across the board a busier month than February with Ford leading the way posting a 19.9% increase. Could it be in anticipation of the April shutdowns? Perhaps since Ford was the only manufacturer of the three that recently confirmed of the April shutdowns in at least two of its factories.
Similarly to our last report we wanted to expand the analysis to not only the automakers but the industry as a whole, this time looking at the Industrial Facilities index as computed by Advan. Besides the Covid-19 effect in early 2020 and the seasonal end of year drop due to the holidays, 2021 has been a year of modest but steady growth with a small hiccup towards the end of March.
One year after the initial lockdowns and stay at home orders across the groble, Americans are now driving a lot more, as measured by our miles driven index. More specifically, the last three weeks Advan’s miles driven index captured an increase in traffic as high as 40% nationwide compared to the pre-pandemic levels in February 2020. As the vaccines are being rolled out people’s confidence is picking up and in combination with certain COVID-related restrictions being lifted and the advent of Spring and Spring breaks, everyone seems to be making up for lost travel.
The trend is the same across multiple states. Looking at the miles driven index for the heavily impacted New York, after the sharp drop in traffic down to -44% the first month into lockdowns back in April 2020, the traffic the last 3 weeks is up 24% compared to what it was pre-pandemic levels. Same pattern for Texas, one of the first states to lift almost all the COVID restrictions such as mask mandate, restaurant occupancy limits and others: the traffic is up 36% in the last 3 weeks. For California and Florida, the traffic is up 10% and 19% respectively year-over-year.
We looked at the Truck miles driven index and compared to car miles driven (Jan 7, 2020 is used here as the baseline date); shipments have remained mostly steady through the pandemic, these has not been additional capacity added, but there are no significant troughs either.
In Europe (including the UK), things are quite different as many countries enter a third wave of COVID infections and the lockdowns are being extended. In the UK and Spain, the traffic on the roads is over 60% down in the last 3 weeks compared to pre-pandemic levels. In Germany, after a busy summer with the traffic up 50%,during the last 3 weeks it dropped significantly to -46%.
It is also interesting to see what traffic at Tesla charging stations tells us. We see that traffic in charging stations materially lags total miles driven. Given that most Teslas have lower range and are used mostly for commuting, we surmise that a material portion of the added mileage is for longer trips.
It’s been a year now into full or partial lockdowns, social distancing rules and work from home as a result of the COVID crisis which unequivocally forced people to spend more time into their homes and consequently to change their shopping habits - reconsidering what is essential and therefore set new priorities on what to buy.
One of the new essentials seems to be – not surprisingly – bedding products as people seek extra comfort at home. Mattress sales soared in the second half of 2020 since many Americans decided to upgrade their sleeping setup.
On Thursday February 11, 2021, Tempur Sealy (NASDAQ:TPX) posted record revenues of $1.06bn for the quarter ending December 2020, surpassing the consensus estimate of $985mm and in the same direction as Advan’s forecast. The company said its global sales grew 21% year-over-year and their online sales in the US doubled compared to prior year. It is noteworthy that Tempur Sealy’s top line revenue and Advan’s foot traffic at its factories have a correlation of 0.85 over the last 16 quarters. The mattress maker is among others which is overwhelmed with the spike in demand caused by COVID crisis to the point that exceeded the manufacturing capacity (read our recent blog for shortages in other industries).
We looked at the foot traffic at Tempur Sealy’s factory sites and saw the traffic were almost doubled from June 2020 to Jan 2021 compared to year earlier. By using our “Trucks” product, we also saw the truck traffic hitting 202% increase in July and not falling below 150% throughout the summer, an indicator that summer months were the busiest in terms of production and order shipments. Things started cooling down a little bit since October with the traffic to fall (still up) to 60% YoY, with the trend going upwards – January 21’ closed with 112% increase in traffic compared to January 2020.
Using Advan’s factory traffic in combination with truck mobility at the same factories has proven to be one of the most accurate ways to get insights on to the company’s performance.
One of the most popular use cases of location data for landlords and developers is the site selection. Another more popular for Real Estate investors, Private Equity firms and retailers is monitoring of the performance of their assets/stores.
On a recent article published by Kate Gibson, Kroger, one of the most prominent grocers in the US, is expected to shut down two California stores to avoid offering workers ‘hazard pay’. Both of these stores are located in the Long Beach area, one is under the Ralph's franchise while the second one under Food 4 Less(both brands are Kroger subsidiaries).
When big firms like Kroger decide to close a store, they are taking into consideration many parameters; the first one comes to mind is the profitability of the store itself. Kate’s story sparkled our interest and we decided to dive into our data further to put this hypothesis to test: is Kroger closing these stores due to the ‘hazard pay’ or there are other fundamentals reasons behind it such the stores have not been performing that well?
On the first chart we have isolated all the Ralphs stores in the area and compared them to their peers nationally. There are five such stores in Long Beach with mostly the same foot traffic pattern, the majority of them is following the national average but the store located at 2930 East 4Th Street is doing significantly worse than the others. It stands out as the worst performer with more than 40% YoY drop, so if foot traffic was an indication of which store would be closing, the strongest candidate would be this.
On the second chart we have isolated the three Food 4 Less stores in Long Beach. Things are a bit clearer for this chain as the best store of the 3 ranks 48th out of the 106 stores operating nationally and the second trails at approximately the national average for the grocer. The store located at 6700 Cherry Avenue though has been lagging consistently over the last few years and ranks 75th for the last quarter while the average drop in its foot traffic is about 48% for the same period.
Even though there is a significant evidence of underperforming stores across these two brands, we cannot be certain for the reason of closure. Having said that we can have a more educated reading based on our foot traffic analysis on which are the more likely stores to close. If you want to see our full analysis and see how these two brands Food 4 Less and Ralph's compare to the parent entity (Kroger) along with the rest(more than ten grocer brands that Kroger owns) please contact us.
After the lockdown last spring that forced manufacturers from all sectors to halt production, auto makers now have to face another challenge: the global chip shortage due to the high demand on consumer electronics (laptops, gaming consoles, TVs etc.). The increased need for the technology devices along with the initial lockdowns and employee furloughs overwhelmed chipmakers and now are struggling to keep up with the surge in orders. Another factor was the faster than anticipated recovery in the second half of 2020 as several manufacturers in the sector ramped up the car production to rebound from the spring’s shutdowns and increase the chance of hitting the year’s target.
In an effort to tackle the crisis on chip shortages, carmakers announced they would cut production. Fiat/Chrysler was one of the first to idle some of its factories. It did not take long for Ford and General Motors to announce their plans to slow down the car production to deal with the limited supplies.
We looked at the data at the US plants for the 3 carmakers. In January, Fiat/Chrysler employee counts were down 35% year over year while at Ford’s and GM’s factories down 19% and 13% respectively.
However, automakers are not the only ones to face shortages in supplies. Other industries struggle too, forcing them to production disruptions. Looking at the foot traffic data to Advan’s Industrials index, we saw that employee counts have been decreasing since mid-November 2020 signaling a slow-down in production to other industries in the sector.
GameStop Corp (NYSE: GME) has been the focus of the investment community for the last couple days and for a justifiable reason. A lot has been written about the technicals of the trade and the various market participants, how they affect the supply and demand and drive the stock price. But we have decided to spin it a different way and look at the fundamentals of the issuer.
This is our second blogpost about GME, our first one back in October 2019 explored the misconceptions that can result from using location data incorrectly.
In order to analyze the fundamentals of the business we looked at the foot traffic (unique visitors to all operational stores) of the retailer since 2019. The blue shaded line in the chart represents the daily foot traffic. Patterns such as the weekly spikes are due to the fact that more shoppers visit GME stores during the weekend than on weekdays. In addition to this, the seasonality around the holidays can be easily seen (more traffic in December, for example, and a big spike on Black Friday). The chart also clearly shows us the exact dates when all stores are closed, such as New Year’s day, when the traffic goes to zero. From a macro perspective, the most predominate observation is the big drop during the COVID period and the slow recovery starting in May 2020. Note that foot traffic has not returned to 2019 levels yet. For instance, the whole month of December 2020 saw 33.68% less foot traffic than the same month in 2019.
By using foot traffic as the key input in our proprietary algorithm, we can define whether a store is open or closed at any given time. Put simply: if there are visitors in the store then we know the store is open, if there are no visitors then we know it is closed. The reality is slightly more complex than this since we don’t simply look at the visitors alone for a given day but we compare them with its historical foot traffic patterns to better define whether the store is open or close.
There are many reasons a store could be closed, for example the retailer may be renovating the property, perhaps there was an incident on the store that led to its temporary closing, or the retailer may have decided to entirely shut down an unprofitable location. In 2020, the most common scenario was temporary store closings due to COVID 19.
On the chart, the grey and amber lines represent the store counts as reported by the issuer vs the Advan store counts as implied by our foot traffic measurements. Not only is the Advan traffic a more accurate measurement of the stores operating at any given time but it is also a leading indicator. Investors can see in real-time whether the stores are open or closed with much more granular (weekly) updates than those reported by the issuer, which are typically on an approximately quarterly basis.
Foot traffic analysis for hotels around the US showed vastly different trends over the holiday season. Compared to the first week of November, hotels in Florida saw a foot traffic uptick of 20% in the week of December 22 - 28, and up 40% in the week between Christmas and New Year, as Americans flocked to warmer climates.
Colorado hotels also saw a healthy increase in traffic of 19% in the final week of the year as skiers took to the slopes over the holidays. California and Texas, however, did not enjoy the same rebound in tourist traffic. In California, hotel visitors were down 31% over the holidays and in Texas it was down over 13% compared to the start of November.
While Florida and Colorado saw spikes in tourist traffic, Texas was the busiest state for retail - specifically for malls. Compared to the first week of November, traffic at malls in Texas was up 55% in the week of December 15 - 21, and up over 35% in the final week of the year.
Florida and Colorado also saw growth in mall traffic - up 48% and 32% respectively in the week prior to Christmas, in part driven by the increased number of visitors to those states.
Airport foot traffic data from the same four states tells a similar story, with traffic at Florida’s airport climbing steadily over the holiday period and through the end of the year. Airports in Texas also saw a noticeable increase in traffic over the holiday period as Americans flew from around the country to join their families.
Despite the increased hotel traffic in Colorado, airport foot traffic did not show a significant increase. Possibly because visitors to Colorado were more likely to drive than to fly to its ski resorts.
What a year it’s been! Few people will be sad to see it go and certainly here at Advan we are excited for what 2021 may bring.
To cap off the year, we’ve listed below what we think are 5 of the most interesting mobility trends in a year full of unexpected twists and turns. We look forward to more next year!
Wishing you a restful holiday season!
Advan’s Top 5 Mobility Trends of 2020
1. We learned the real definition of ‘essential’ retail: Costco, Walmart, Home
Depot and…Amazon!
From the very start of the pandemic as we all stocked up on canned goods and toilet paper, and much of the country went into lock-down, foot traffic data clearly showed that big box retailers would be early winners. Despite restricting the number of customers in stores - and the now familiar image of 6ft-spaced line-ups outside - visitor numbers to Walmart and Costco barely fell year-over-year. At its lowest, Costco foot traffic was down 31%. More surprising perhaps was the performance of home improvement retailers like Home Depot which, from May onwards, saw an increase in foot traffic compared to last year. But the clear winner was Amazon. As more shopping moved online, the number of employees at Amazon warehouses went through the roof - as did the company’s revenues, which were up 37% in the third quarter of 2020.
2. Despite what seemed like certain death, malls look set to fight another day
Even before the pandemic, stories were emerging about a bifurcation in the fate of malls. It was becoming apparent that top rated malls were gaining ground, with lower rated malls increasingly struggling to attract customers. During the early height of the pandemic, in April and May, no malls were spared. Traffic was uniformly down almost 100% at all locations. Yet, over the past several months, despite fluctuations in COVID case numbers and vast differences in regulation across states, we have seen a steady return of visitors to many popular malls in the US. In the Fall we saw foot traffic recovering substantially. In particular outdoor malls, such as Woodbury Common in New York, saw foot traffic rebound to just 12% below last year during October. So, while they are not out of the woods yet - traffic was down an average of 45% in December for the 6 malls we looked at - this represents a substantially more optimistic outlook than many hoped for 6 months ago.
3. Even during the height of lockdown the number of miles driven by Americans hardly fell.
The Advan Miles Driven index is one of our favorite measures of human mobility. It has over 0.95 correlation with the Highways Administration estimate of miles driven. It’s used widely by macro traders as well as fundamental investors as an input for predicting demand for oil and gasoline prices. With an estimated 93% of US households owning a car, there should perhaps be little surprise at our dependency on motorized vehicles to get around. During the nadir in April, when most of the country was locked down, the average number of miles driven in the US was down 33% year-over-year. But this soon bounced back as restrictions imposed by lock-down were cancelled out by a reluctance to use public transportation. In December, miles driven were down just 9% compared to last year.
The restaurant sector was among the hardest hit but those that pivoted quickly showed greater resilience.
Many of us, when asked what we’ve missed most during the pandemic, will list having dinner or drinks out with friends among the things we most look forward to doing again. The restaurant sector has suffered more than most during the past several months. Fine dining has no doubt been the worst affected, with indoor dining all but halted or severely restricted. Yet among quick-service restaurants (QSR), those that were quick to pivot have seen some gratifying results. By making the most of patio space in the summer months, improving their online offerings, and developing easy and efficient curbside collection, chains such as Darden’s and Chipotle have managed to regain substantial foot traffic. Traffic at Chipotle was only down 34% in December, compared to 90% in April and 81% in May. Darden’s was down just 27% in September and 22% in October. Many of the changes made by the chains will hopefully carry them forward with renewed momentum as we head into the new year.
5. COVID resulted in significant migration out of New York City
In November we launched a new platform that enables easy and fast tracking of
migration around the US. REPerspectives shows us how residential patterns are
changing over time.
As one of the cities hit hardest by the virus, New York has seen a significant reversal in
its typical migration trends. In the first 6 months of 2019, New York City (specifically
Manhattan) saw a net outflow of just 2,860 people (essentially flat). During the same
period of 2020 the net outflow was 56,280 with many Manhattanites who were now
working from home and had the option to relocate, electing to leave the city. Time will
tell whether this is a permanent trend or whether the Big Apple will prove to be the
magnet it has always been.
As New Yorkers, we are optimistic that the allure of the Big Apple will return once the
virus has been tamed. And that its restaurants, bars, stores and offices will be thronging
with tourists and residents once again!
Wishing you happy holidays and a healthy and joyful new year!
Follow us on Twitter and LinkedIn.
There is no question that a segment of retail has moved online this year. Offline (i.e.in-store) credit and debit card spending is down 15% year-over-year versus total spend according to transaction data from ConsumerEdge.
Foot traffic at consumer discretionary store locations is also 20% lower year-over-year than foot traffic to production locations for consumer discretionary retailers.
These parallel trends show us that foot traffic trends at store locations closely reflect offline spending, while traffic at production facilities gives us a window into total spend - both online and offline.
The number of visitors at consumer discretionary businesses is a good bellwether for activity since it gives us insight into how willing people are to travel for non-essential goods.
Another useful measure of activity is our Miles Driven index, which correlates at approximately 0.90 with the Highway Administration’s miles driven estimates.
When we compare miles driven data with consumer discretionary foot traffic we notice an interesting trend. While the number of miles driven has been more or less flat over the past 3 months - down only 4% year-over-year - in November consumer discretionary foot traffic was down 30% due to a renewed lock-down measures across the country.
So US residents are moving around the country but they are visiting stores in much lower numbers than we would normally expect at this time of year.
Another discretionary activity that has been highly effected by the pandemic is restaurant visitation. These have been among the most affected businesses and we see a very strong mirroring of foot traffic trends to restaurants compared to consumer discretionary retailers.
In November, restaurant visitation was down 31% year-over-year and consumer discretionary foot traffic down 30%. While this is a fairly big drop, the year over year trends have been very steady over the past several months since May, providing signs of hope that this second wave of lock-downs will not have as a dramatic impact as the first.
Advan analysis of footfall at US airports shows a gradual upward trend in traveller numbers, although volumes still remain significantly depressed compared to March.
Comparison with TSA screened passengers shows a very high correlation over time, of over 99%. This means that foot traffic data provides almost 100% confidence in showing the number of travelers passing through airports in the US.
After months of travel restrictions and lockdown, there is some hope on the horizon for hotel chains such Hilton. Foot traffic is a very accurate measure of performance for hotels, as well as for cash-heavy businesses such as casinos.
For such type of companies tracking performance by transaction data is tricky, due to the fact that the booking date is different than the visit day and hotels have to book the revenue when the patrons visit the hotel, not when they book it (by GAAP standards). Rooms are typically booked in advance but can also be cancelled up to 48 hours in advance. Also, the common use of third party travel sites for booking rooms makes it difficult to allocate transactions to the correct hotel accurately
Mobility data based on visitors to a hotel provides very high confidence that a transaction has taken place and revenue will be captured.
Taking Hilton Group as an example, on a year-over-year basis foot traffic and revenue have consistently proven to have a correlation of almost 0.95. During the second quarter of this year both revenues and foot traffic for Hilton were down almost 80% compared to Q2 of 2019.
In Q3 both recovered steadily and were only 60% down year-on-year, offering hope that as mobility returns, revenues will do so as well.
Another business that has shown a very close relationship between foot traffic and revenues is Bed, Bath & Beyond (BBBY). Year-over-year correlation between revenues and traffic to stores is almost 0.87. This suggests that customers to Bed, Bath & Beyond have a strong intention to buy when they visit a store.
Like many retailers, foot traffic at BBBY dropped to 80% below the previous year during the first phase of lockdowns in Q2. In the third quarter it rebounded to just 40% down year over year. Revenues were flat compared to the previous year, as the retailer also ramped up its online offering and curbside pick-up.
Malls around the US suffered a significant blow during what is usually the busiest shopping weekend of the year. Foot traffic was down 41% year-over-year on Black Friday and 45% on Saturday.
As we reported in our blog post last week, there was a pick-up in traffic during the first three weeks of November as many people opted to take care of their shopping sooner, in order to beat the rush and in anticipation of lock-down orders across the country. Indeed, earlier in the week - Monday through Wednesday - foot traffic was down around 32% on average compared to 2019.
Looking at the data across different states we also see significant differences, with New York and California suffering far greater losses in foot traffic numbers than Florida and Texas. Likely a reflection of differing restrictions to movement as well as consumer attitudes.
Many retailers will have offset the loss in customers at their locations with online spending, which is estimated to be up 22% . But fewer customers in stores means fewer point-of-sale purchases and less spontaneous, unplanned spending as customers focus on bargains available online.
While all retailers have been adjusting and improving their online offerings this year, one consistent winner continues to be Amazon. The behemoth has seen the number of employees in its warehouses up an average of 139% year-over-year each month since May.
With a new phase of lockdowns beginning across the US, many shoppers have opted to get a jump on Black Friday over the past week. Foot traffic to malls increased steadily across most states other than Texas where case numbers have climbed significantly, although lockdown measures have not yet been imposed. Mall visits in Texas have remained more or less flat since the start of the month.
Florida saw a week-over-week increase of 7% in mall traffic, on top of a 3% increase in the prior week.
California, which has seen more restrictive lockdown orders as a result of spiking case numbers, saw a 3% increase in mall traffic over the past week, compared to a 7% increase the previous week ahead of the current restrictions.
In New York, restrictions have been focused on curbing cases driven by ‘bars, restaurants, gyms and house parties’, according to state governor Cuomo. As an indicator for shopping trends, mall foot traffic in the state suggests that NY state residents are still keen to spend; it was up 5% last week and 3% in the previous week.
It remains to be seen how lockdown measures will affect Black Friday in major shopping districts, Advan will be tracking foot traffic to malls and other retailers with only a 1 day delay in reporting. Stay tuned for further updates after what is normally the biggest shopping weekend of the year.
With the UK now in its second week of nationwide lock-down we are starting to see some familiar patterns of behavior based on analysis of foot traffic data. But there are also some significant differences compared to the first wave.
We looked at 5 indices for key sectors. All of our comparisons are against the average footfall in January 2020, as a pre-COVID benchmark.
In April, when the majority of businesses were closed, foot traffic fell by 80% or more across almost all sectors, with the exception of those in our food stores index. Traffic at supermarkets fell by just 35% in April and soon recovered. During September it was flat and in October up 4% compared to the start of the year.
Traffic to restaurants, clothing & accessories retailers and general merchandisers also saw some respite during the summer months as lock-down eased and people embraced more freedom to shop and travel. Visitors to these merchants was around 10 - 15% below January during the August - October time frame.
Furniture stores have been a clear winner during the pandemic, as people spruced up their living space and created home offices. From a drop in visitors of 100% in April and May the sector rebounded, with foot traffic in October 24% above January.
In November, however, as we would expect given the new lockdown rules, visitor numbers have plummeted again across the board. Yet, if we compare the fall in traffic this month with the trends back in April, we notice markedly different attitudes towards the restrictions.
Our clothing and accessories index is down 51% in November to date, compared to a fall of 87% in April. General merchandise is down 38%, compared to 69% in April. Restaurants are down 47%, compared to 81% in April.
There are likely a couple of important things at play. First, the restrictions are not as stringent as they were during the first lock-down. Secondly, after 8 months of living with the virus, retailers and consumers have adapted their services and behavior to enable a better balance between keeping populations safe and enabling businesses to operate and survive.
Among the many social and cultural changes that the pandemic has brought about, arguably the most impactful will be the ways in which it has influenced our decisions about where to live. Not just temporary relocations while we ride out lock-downs and WFH, but permanent migration that will alter how we live and how we spend.
Mobility data allows us to see these patterns in almost real time and our recently launched REPerspectives portal allows us to easily visualize where people live and where they are moving to, at any census level.
Let’s take a look at some pattern changes, starting at the state level.
With Manhattan as a financial center, New York faced huge changes to its mobility patterns as soon as lock-down was imposed. Between January and July of this year, half a million adults migrated out of New York state, while its net outgoing migration (those moving out minus those moving in) was 11,500; for comparison in the same period in 2019 there was a net influx of 45,500 adults. This represents a 125% net change in behavior. The primary destinations were New Jersey (6%), Connecticut (2%) and Pennsylvania (3%), with Massachusetts, North Carolina, Virginia, California and Texas all seeing an influx of New York state residents.
Looking at the county level - for New York county (Manhattan) and over a longer period, during the period January 2019 to July 2019 most migrations form the city are to Brooklyn, Queens and Long Island, with some also going to New Jersey, Westchester, Connecticut and Florida. Counties in blue are those who had a net inflow of residents FROM New York City. Those in red saw net outflows TO New York.
Looking at the same picture for 2020 we see a much broader dispersion, with many more residents moving to other counties outside of Manhattan across New Jersey, Connecticut, upstate New York and to Pennsylvania, as well as down to Florida.
This data is for the first 6 months of 2020, so it likely signals just the beginning of a longer term trend out of urban centers like Manhattan to suburbs and smaller towns, where the normalization of home working is starting to alter the way we think about location, commuting and quality of life.
After a dismal April and May, when casinos across the country were closed to visitors, Nevada’s casinos have been slowly recovering. But although many casinos on the strip are now open, foot traffic remains depressed - down 40% year over year in October to date. Around the country, the pace of recovery for the sector has varied significantly by state.
Missouri’s casinos were the first to jump back. As early as June, foot traffic was only down 50% compared to the previous year. While in New York, even through August, traffic was down 100% year over year with casinos closed throughout the state.
Fast forward to October and the picture looks quite different. Traffic at New York casinos is now down only 39% from last year. Missouri is down only 25%, and New Jersey down 33%. Nevada has been the slowest to recover, perhaps because it relies more on tourist traffic compared to casinos in other states, for whom a greater portion of business comes from local visitors. The cancellation of conventions in Las Vegas has also had a significant impact on overall traffic to its hotels and casinos.
With regulations varying around the country as states work to control the pandemic, foot traffic data is the most accurate way to understand trends for cash-centered businesses like casinos.
Please contact info@advan.us for additional insights into this sector or for more information about our location data and analytics.
In our recent webinar, we spent some time looking into foot traffic trends at airports in America and Europe.
Location data is a very reliable proxy for airline passengers, since there are few reasons to be at an airport other than to board a plane. Precise mapping can filter out people who have come to collect or drop off passengers from those who have passed security in order to catch a flight.
We compared our foot traffic data for the major US hubs with the number of passengers reported as screened by the TSA and found a correlation of 0.9.
It’s no surprise that air travel is significantly down due to the pandemic. But our data does offer a glimmer of hope for airlines. While foot traffic to the major US hubs remains down 75% year-over-year so far in October, this represents an increase in travelers of 350% since the nadir in April.
By comparison, we also reviewed traffic at European airports. Overall, European air travel saw more of a pick-up during the summer months than the large US airports. This makes some sense. With inter-continental travel restrictions eased, many Europeans took advantage and went on vacation in July and August.
Athens airport in Greece briefly saw it’s traffic return to pre-pandemic levels, although it has dropped again since September. Barcelona airport, by contrast, barely saw an uptick in passengers before a resurgence of cases in Spain meant restrictions were reimposed.
For more information on travel trends, or to learn about how we calculate correlations please contact info@advan.us
In a previous blog post we talked about how the home improvement sector has been one of the bright spots in the pandemic. Year-over-year foot traffic to building material retailers was up 26% in September.
Given this trend, we wanted to look in more detail at one of the most popular companies in the home improvement sector - Ikea.
While foot traffic at Ikea stores fell to 0 between April and June, once stores reopened traffic rebounded almost immediately to pre-pandemic levels. In September traffic at Ikea stores in the US was up 3% year over year, and in October month-to-date it is trending up 9% year over year.
As with many trends during the pandemic, the overall numbers only tell part of the story. We can break down traffic by state to see how visit numbers vary around the country. Comparing Florida (red), New York (Green) and California (grey) we can see big differences in the trends.
Florida, which was early in easing lock-down restrictions saw the fastest and biggest surge in customer. These number fell again once cases started to rise in late summer. New York’s recovery was more gradual but today visitor numbers have recovered almost as much as Florida. California has also come back slowly, though not nearly as much as Florida and New York.
The beauty of location data is that it enables you to drill down to any level of detail. Beyond state level trends, we can look even more closely at a specific location in New York. The Ikea in Red Hook Brooklyn - the flagship location for the area. Overall foot traffic for this Ikea location was down 45% year over year. We wanted to know why.
In the map on the left hand side - showing September 2019 - you can see where people come from to shop at this store - the True Trade Area. The map on the right shows the Trade Area in September 2020.
This visualization clearly shows where the drop in customers has occurred. A significant portion of shoppers who previously traveled from Manhattan to Brooklyn to visit Ikea are no longer making the trip.
There could be multiple reasons for this. Many of those who are lucky enough to be able to do so have elected to leave Manhattan and work from their weekend home. Some have left the city altogether. Our analysis of residential patterns suggests that there has been significant flight out of New York City. Ikea tends to be a first stop for people moving into small city apartments, and this September there have been far fewer new arrivals to the Big Apple than in previous years.
There’s no question that the retail sector has been hit hard this year. Foot traffic at Macy’s, which was already struggling prior to the pandemic, was down 64% last quarter compared to the same quarter in 2019.
Like many of its peers, Macy’s has relied on its online business to bolster revenues during a period when many of its stores were closed.
But, although overall sales have slumped, an interesting trend has emerged for those who do visit stores. When we analyzed Macy’s conversion ratios using our traffic data and Consumer Edge’s transaction data – that is, the ratio of people who visit stores (foot traffic) to those who actually buy in the stores (what we call the number of Transactions), as well as foot traffic compared to total offline sales (in USD), we notice a distinct upwards trend. The chart shows the year-over-year change for both of these ratios.
For the most recent calendar quarter, ending September 30, we can see that the year-over-year change in the number of transactions is 4.4% greater than the change in foot traffic to Macy’s stores - i.e. if people are coming to stores then they are much more likely to buy something. Similarly, the difference in offline sales revenues compared to foot traffic is 3.4%, showing that customers who go to stores are there to spend money. We included the trend over the last couple of years to make sure we are not looking at any seasonal aspects; clearly the conversion is as high as it ever was in recent quarters.
While retailers are focusing on their online offerings, it’s worth noting that customers who come to their stores are likely their most loyal and that for some people the shopping experience cannot be replicated on the internet!
For more information please contact info@advan.us
For investors, foot traffic data is fast becoming a critical weapon as part of an alternative data armory. The value of tracking real-time visitation numbers to retail and consumer-facing compa-nies is widely recognized. Yet, as we explore here, measuring traffic to industrial companies can offer even more effective signals to predict top line performance.
It is intuitive that the number of employees at production facilities should be an indicator of pro-duction, which in turn would help forecast revenues. But production tends to be a leading indica-tor. This means that the correlation between the number of employees at a facility, for example a factory, and revenue is not always visible when overlaying the two data series.
If instead we consider seasonality - and there are seasonal patterns to many consumer purchas-es - and compare the datasets on a year-over-year basis, we start to see much clearer correla-tions.
As an example, we looked at Carlisle Companies (NYSE:CSL), a $7 billion market cap manu-facturer of engineered products. As the chart below shows, we found a 0.92 correlation on a year-over-year basis between the number of employees at Carlisle’s facilities and the company’s top line revenue.
In the second fiscal quarter of 2020 analysts expected revenues of $988 million. Advan’s fore-cast based on foot traffic was $998 million, and actual revenue was $1.02 billion. The revenue number was 22% below the same quarter last year and the number of employees Advan meas-ured was down 24.8% during the same period. The stock closed at 122.65 on July 21st, before the announcement, and opened at 124.15 the next morning.
Next, we looked at Worthington Industries (NYSE: WOR), a metals manufacturer headquartered in Columbus, Ohio, with a market capitalization of approximately $2.2bn. For WOR, the average year-over-year correlation between the number of employees and company revenues was 0.95.
On September 23, the company announced an earnings miss. Company revenues were down 35% year-over-year with Advan employee foot traffic down 19%.
Join our webinar: Company and Sector Recovery Analysis - Thursday October 8, 2020 @ 12pm EDT.
For more information please contact info@advan.us
