in this 4-minute read:
- How important is the holiday season for local retail?
- What impact has COVID-19 had on retail business revenue?
- What are the top 5 days of the year for local retail?
- How big are the biggest weeks of the year?
The holiday season is always vital for local retail businesses across the U.S., but this year it’s even more important than usual due to the strain that the COVID-19 pandemic has put on all local businesses.
In preparation for our State of Local Retail report for 2020, Womply Research has been looking at spending, closure rates, transaction trends, and more at local retailers across the country. In this article we’ll touch on some of the highlights for local retail over the past challenging year, and point out some of the question marks as we move into what may be a “sillier than usual” season.
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Total weekly spending at local retail businesses: 2020 vs. 2019
As you can imagine, the coronavirus pandemic and the resulting lockdowns have had devastating effects on consumer spending, business closures, and just about every other aspect of small business. Let’s look at spending at local retailers on a weekly basis first.
According to our research, consumer spending at local retail businesses dropped significantly due to the COVID-19 lockdowns, with the low point nationally in mid-to-late March of 2020.
As you can see from the chart above, on a national level, spending at local retailers rebounded during June, with year-over-year increases of over 15% in some weeks.
As the uncertainty and prolonged pandemic continued, those gains have been sporadic and we are trending into a low period during the fall of 2020 as COVID-19 cases spike in many areas, and many states have tightened restrictions once again.
This leaves a lot of question marks about how the holiday season of 2020 will shake out. And this year, local retail could really use a shot in the arm.
Business closure rate for local retail during 2020
Womply’s data shows that businesses in certain verticals had closure rates of close to 90% in some states. On a national level, around 40% of local retailers that were regularly transacting before COVID-19 had closed their doors during the height of the pandemic.
The closure rate has subsided somewhat from the peak during March and April 2020, but as of late November, 18% of retail businesses were still closed, and it appears to be worsening.
When are local retailers the busiest in a typical year?
In the past, local retailers have relied heavily on the holiday season to drive sales. The data science team at Womply analyzed transaction data at 42,000 local retail shops across the United States for every day of the 2019 calendar year to find out when these retailers were busiest. Here’s what we found:
Weekly revenue at local retail businesses in 2019
Mother’s Day is usually a key moneymaker for local retailers. Of course, in 2020, many retailers were still in lockdown for Mother’s Day and consumers were wary of venturing out, so the numbers were way down, as you can see in the chart above.
In a typical year, Mother’s Day is the second-biggest period of sales for the entire year, as you can see in the 2019 chart below. (Furthermore, the Friday before Mother’s Day was the number-one revenue day of the entire year.)
Since the pandemic already dealt a severe blow to local retailers during the Mother’s Day period, a big holiday season will be vital for many retailers’ continued survival this year.
Top revenue days of the year for local retail: The holidays are crucial
As you can see from the previous chart, the holiday shopping season is absolutely crucial for local retail. In fact, 4 of the top 5 revenue days of the year fall during the holiday season, including:
- Black Friday – No. 4
- Friday before Christmas – No. 3
- Saturday before Christmas – No. 5
- Two days before Christmas – No. 2
As noted earlier, the Friday before Mother’s Day was the top revenue day all year in 2019. In 2020? Not so much.
“Panic week” is the top revenue week of the year
The holiday shopping season also drives 2 of the top 5 revenue weeks of the year. The last full week before Christmas, which is coming to be know as “panic week,” is the number-one revenue week of the year for local retailers, and the week before that is number 4 for the year nationally.
As you can see in the chart below, these “top weeks” of the year for retail spending give local businesses a significant boost in revenue… up to 32% more than a typical week. When the pandemic takes this type of revenue away from local retailers, it’s difficult to recover.
A big holiday shopping season might save local retail in 2020
Local retailers have had to scramble to meet COVID-19 restrictions, adhere to government lockdowns, and adjust to new ways of meeting their customers’ needs despite a reduced workforce and/or in-store shopping capacity, among other regulations.
A lull in the pandemic during the holiday shopping season (along with an increased focus on online ordering, delivery, curbside pickup, etc.), may be key for many of these local retailers to survive. We’ll keep you posted on the state of local retail and examine the real impact of the pandemic on local businesses in our full report. Stay tuned!