Retailers across APAC continue to feel the repercussions of uncertainties in in the Chinese stock market. Similarly, in the UK the potential knock-on impacts of the EU referendum are being widely discussed; headlines are filled with warnings about how the BREXIT campaigns are impacting consumer confidence. Should retailers and shopping centres be looking at political and economic trends and planning for their effect on consumer spending?
All eyes were on Canberra today (Tuesday 3rd May), when the Australian federal government revealed its annual budget. This announcement will interest the retail sector in more ways than one, as it’s not just their business finances that will be affected.
In the wake of the budget announcement, Australian consumers will be following the news closely, to see how it impacts their personal finances – and historically this uncertainty has tended to drive them away from stores and shopping centres.
An analysis of original ShopperTrak data shows that there is a clear dip in consumer activity during May, when the announcement takes place every year; monthly footfall declined -12% in 2015, -7.1% in 2014 and -9.8% in 2013.
So why do Australians stay away from stores and shopping centres around the time of the federal budget announcement? Comparing our people counter data with retail sales and consumer confidence figures reveals some interesting patterns:
Clearly, the thought of impending economic changes is cause for concern among shoppers – and they tighten their purses as a result, generating the drop in retail and shopping centre footfall.
Is this trend likely to continue in 2016? Certainly, fear of the unknown is an ongoing factor impacting retail footfall, and a number of early headlines have pushed the announcement into public consciousness already.
The good news for businesses is that post-budget uncertainty doesn’t last for long. ShopperTrak trends data shows that, within a fortnight, shopping centre and retail store activity bounces back to the same or near-equal levels with the previous month, as shoppers adjust to fiscal changes and their confidence begins to return.
Across the globe ShopperTrak consultancy services can enable retailers and shopping centres to understand the exact impact of cultural, economic, political and social events on their business. Retail businesses cancontact ShopperTrak directlyfor bespoke insights.