Antitrust & Competition Policy Blog

Editor: D. Daniel Sokol
University of Florida
Levin College of Law

Wednesday, April 14, 2021

The Short Term Impact of COVID-19 on Brick-and-Mortar Retailers: Evidence from Retailtech

The Short Term Impact of COVID-19 on Brick-and-Mortar Retailers: Evidence from Retailtech

Pinar Yildirim

University of Pennsylvania - The Wharton School

Abstract

The novel coronavirus 2019 (COVID-19) pandemic, the associated stay-at-home orders, and consumers’ desire to physically distance from crowds dramatically impacted brick-and-mortar retailers. This paper documents the impact of COVID-19 on the retail traffic of physical stores. Using data from 49,712 stores, 484 retail chains, and 20 retail product categories in the United States, we compare same-store traffic on matching days of 2019 and 2020. Controlling for the changes in operating hours of stores and local pandemic conditions, we find that the stay-at-home orders resulted in 64.7% decline in consumer traffic on average between March 1st and July 29th. Consumer traffic declined in all the 20 retail categories we study, but the decline was heterogeneous across product categories. Whereas home and office goods were less negatively impacted, apparel, sporting, gift, and department stores suffered the most. Store operating hours declined by 2.5 hours daily between March 2019 to the end of July 2020, on average. Consumers also changed their shopping habits such that, shopping moved to weekdays from weekends and to earlier hours of the day rather than the afternoon and evening hours. These findings suggest that as working-from-home practices become more common place and the pandemic lingers, retailers will need to make significant structural changes to their operations.

https://lawprofessors.typepad.com/antitrustprof_blog/2021/04/the-short-term-impact-of-covid-19-on-brick-and-mortar-retailers-evidence-from-retailtech.html

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