The growth of e-commerce and the omni-channel retail strategy appears to be having a significant impact on retail store foot traffic according to ShopperTrak. An article in today’s WSJ highlights the issue “Retailers got only about half the holiday traffic in 2013 as they did just three years earlier, according to ShopperTrak, which uses a network of 60,000 shopper-counting devices to track visits at malls and large retailers across the country. The data firm tracked declines of 28.2% in 2011, 16.3% in 2012 and 14.6% in 2013.” Urban Outfitters Inc. CFO Frank Conforti commented on an investor conference call “The reality is, we just don’t see that changing.”
These changes in store foot traffic may explain part of the reason retailers like Home Depot Inc, Gap, and Sears Holdings are closing stores or cutting back new store openings. As fewer consumers show up to walk the isles retailers do not need as much retail space. Only 44 million square feet of retail space opened in the 54 largest U.S. markets last year, down 87% from 325 million in 2006, according to CoStar Group, Inc., a real-estate research firm.
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