Traffic Declines – Part 1

Apr 3, 2024 | Finconomics 101, No Bull Economics

Why is Retail Traffic Lower? Post Banner

How can restaurant/retail traffic decline every year unless something is shrinking? We understand how traffic declined during the notorious covid lockdowns, but it seems that these declines have continued for at least the next 4 years with no definitive end in sight. Are the same number of consumers shopping less frequently? Are there fewer consumers? We have yet to hear a logical explanation for this troubling trend which should be a major concern for every retail stakeholder…


  • Ever since post-covid we have been comforting ourselves with the idea that this is finally the year that restaurant & retail traffic will turn positive. But, alas, that has not been the case & we continue to see the biggest retail chains reporting traffic declines with no apparent end in sight.
  • While it is doubtful that anyone has exact aggregate traffic data, we have created some assumptions in the model below that are roughly based on quarterly data points that have been publicly reported.
  • As we can see from this back-of-the-envelope analysis, there is a realistic possibility that 5 straight years of restaurant/retail traffic declines may leave us with a much smaller active transaction base (over 20% smaller since covid).  This explains the need for the chains to compensate with retail price increases in excess of their input cost inflation.   
  • Notably, we think it is telling that ARKO and Casey’s General Stores are also reporting sharp declines in gasoline gallons sold by the industry which parallels the retail traffic declines.
  • In the following analysis, we explore possible reasons for these declines.

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