Ongoing Post-Covid Transportation Changes Have Retail Implications

Jan 4, 2024 | Macro Insights, No Bull Economics

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Consumers on the go are more likely to visit retail establishments & ongoing post-covid traffic pressure reflects that the public is still not as mobile as they once were. It is unclear whether consumer mobility will eventually rebound to previous levels, and, notably, this trend has driven an increase in the DSP delivery business.   

Key Points from the Recent St. Louis Fed (FRED) Posts

  • Americans continue their post-covid trend of migrating to the suburbs & other car-dependent areas. FRED points out that while people may choose to live in cheaper areas that are further away from urban centers, many still value the urban amenities that require them to drive into town.
  • Further, FRED referenced a 2019 study that found that people who worked from home drive more miles than people who commute to work.
  • While this may be the case, it is notable that 269,000MM vehicle miles driven during October 2023 remain -5% lower than the 284,000MM level of February 2020 as outlined in the chart below. Perhaps this at least partially reflects that gas prices were -21% lower in February 2020?   
  • FRED also points out that public transit ridership appears to be leveling off at -30% below pre-covid levels. This could be at least partially explained by the migration away from large metro areas (NYC, Chicago & D.C.) which offer well-established public transit systems.
  • In any case, the data in the chart below shows that there are fewer people on the road & this is confirmed by retail traffic trends. Given that the covid fear factor is long behind us, the question remains: where are all the shoppers?   

Vehicle Miles vs. Public Transit Ridership Graph

Source: How are we transporting ourselves? Part 1 | FRED Blog (stlouisfed.org); How are we transporting ourselves? Part 2 | FRED Blog (stlouisfed.org)

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