Many mom-and-pop businesses have been severely affected by the coronavirus pandemic. There is, however, a silver lining for local retail as many have adjusted their business models to reflect the times. For example, with more consumers shopping online, local retailers have benefited from going towards e-commerce. E-commerce platforms, such as Shopify, have helped small businesses gain back their lost in-person sales. Research conducted by Accenture found that 56% of consumers are shopping at local stores in their neighborhoods. This suggests that consumers are wanting to help out their local economy by choosing to not shop at big chains. But, does foot traffic data reflect this trend? To find out, we compared foot traffic at major chains and local retailers to determine the extent to which consumers are supporting mom-and-pop businesses.
Overview: Impact of COVID-19 on Mom-and-Pop Businesses vs. Big Chains
When the pandemic began in early March, foot traffic to both chains and non-chains dropped dramatically, in part due to store and restaurant closures. While both big chains and mom-and-pop businesses saw foot traffic at its lowest during the week of April 12, mom-and-pop businesses were more impacted and slower to recover. This began to change in mid-July, when chains saw a slight drop in foot traffic while mom-and-pop businesses continued their recovery. By the beginning of August, non-chains had recovered slightly more of their foot traffic than big chains.
Are Consumers Shopping In-Store at Mom-and-Pop Retailers?
Major chain retailers were also less impacted and recovered foot traffic faster than non-chain retailers. For the week of March 8, foot traffic to big retailers was 4% lower while foot traffic at smaller shops was already 15% lower compared to the week of February 2. Consumers might have decided that they needed to stock up on essentials in bulk at wholesalers like Costco. This trend continued throughout the spring, but by mid-July, consumers were going back to mom-and-pop shops. For the week of August 23, foot traffic to mom-and-pop stores was 6% lower than the week of February 2, while foot traffic to big retail stores was 3% lower.
Are Consumers Eating Out at Mom-and-Pop Restaurants?
Foot traffic to restaurants followed a similar trend until mid-March, possibly due to many restaurants closing their indoor dining rooms. Starting in mid-March, however, restaurant chains began to outperform their non-chain counterparts. For the week of May 3, foot traffic to chain restaurants was 29% lower while foot traffic to mom-and-pop restaurants was 45% lower compared to the week of February 2. As the weather began to turn warmer,, consumers gradually returned to restaurants, perhaps to take advantage of outdoor dining. Starting in mid-June, the difference in foot traffic between non-chains and chains began to narrow. By the week of August 23, foot traffic to big chain restaurants was 17% lower while foot traffic non-chains was 19% lower, compared to the week of February 2.
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Are Consumers Staying at Mom-and-Pop Accommodations?
Mom-and-pop accommodations are a bright spot in the post-COVID economy. Due to reduced consumer travel, the hospitality industry has seen a decline in accommodation bookings. Non-chains and chains followed a nearly identical trend until late May. This is when non-chain accommodations began to recover foot traffic faster than their bigger competitors. For the week of July 19, foot traffic to mom-and-pop accommodations was 23% lower (compared to the week of February 2) while big chains were 35% below pre-COVID levels. Based on this data, it appears that smaller hotels and accommodations may have appealed to travelers as a safer alternative to more crowded chain hotels.
Predicting the Future Foot Traffic at Mom-and-Pop Businesses
While many predict the continued demise of mom-and-pop businesses, it isn’t all doom and gloom. Local mom-and-pops are adapting to changes in consumer preferences and altering their customer experiences to be more digital forward. There is also a growing consumer movement towards shopping local and supporting small businesses impacted by COVID-19. We predict that mom-and-pop retail and restaurants will continue to recover foot traffic, at a pace similar to their big chain counterparts. As consumers plan out their socially-distant winter travel plans, we think that mom-and-pop accommodations, especially ski resorts, will continue to outperform major players in the hospitality industry in terms of foot traffic.