Retail Spending Research Articles

A Better Way of Understanding the US Consumer: Decomposing Retail Sales by Household Income

Changes in retail spending reflect changes in consumer demand for goods. For the past several months, retail sales estimates published by the Census Bureau have indicated that consumer demand for retail goods remains resilient. However, published measures do not provide details on which consumers’ spending has remained resilient. Using a detailed micro dataset, we construct a measure of average retail spending for low-, middle- and high-income households.

Greened shopping spaces and pedestrian shopping interactions: the case of Christchurch

Greened shopping spaces and pedestrian shopping interactions: the case of Christchurch

One size fits all? The value of standardized retail chains

AbstractMulti‐outlet firms, or chains, account for most US retail spending. This article quantifies the welfare and profit effects of standardized chains in the restaurant industry: chains face higher demand than independents, but are less flexible in customizing product selection or prices across locations. I find that on average chains could earn 19% higher variable profits if they could customize their product optimally, but they would lose 28% of their variable profits if they were to lose their demand advantages. Local policies that ban chains would decrease consumer welfare by 1.5% to 5.4% of restaurant spending and disproportionately impact lower income consumers.

Spending Responses to High-Frequency Shifts in Payment Timing: Evidence from the Earned Income Tax Credit

This study explores the spending response to tax refunds for Earned Income Tax Credit recipients using a novel dataset combining transaction-based measures of retail spending with administrative IRS data on tax refunds. Our dataset allows us to exploit variation in the timing of EITC refunds, including changes related to the 2017 PATH Act, along with cross-state differences in refund magnitudes to identify spending responses. Results show EITC recipients spend about $0.30 per refund dollar ($1,150 for the average refund) within just two weeks of issuance, suggesting stimulus targeted at this population may provide a quick boost to aggregate demand. (JEL D12, E32, G51, H24, I38, K34)

Exploring CBD Retail Performance, Recovery and Resilience of a Smart City Following COVID-19

The city of Christchurch, New Zealand, incurred significant damage due to a series of earthquakes in 2010 and 2011. The city had, by the late 2010s, regained economic and social normalcy after a sustained period of rebuilding and economic recovery. Through the concerted rebuilding effort, a modern central business district (CBD) with redesigned infrastructure and amenities was developed. The Christchurch rebuild was underpinned by a commitment of urban planners to an open and connected city, including the use of innovative technologies to gather, use and share data. As was the case elsewhere, the COVID-19 pandemic brought about significant disruptions to social and economic life in Christchurch. Border closures, lockdowns, trading limitations and other restrictions on movement led to changes in traditional consumer behaviors and affected the retail sector’s resilience. In this study, we used CBD pedestrian traffic data gathered from various locations to predict changes in retail spending and identify recovery implications through the lens of retail resilience. We found that the COVID-19 pandemic and its related lockdowns have driven a substantive change in the behavioral patterns of city users. The implications for resilient retail, sustainable policy and further research are explored.

Impact of movie-watching on cross-selling revenue in shopping malls: Implications for post-pandemic recovery

The COVID-19 pandemic has prompted consumers to postpone in-store purchases and shift to online shopping, decreasing overall retail spending. As the global lockdown eases and shoppers return to offline stores and malls, shopping malls seek to facilitate in-store consumer experiences at entertainment facilities. Given the importance of entertainment facilities to the cross-selling revenue of shopping malls, we investigate the relationship between consumers' movie-watching and subsequent (hedonistic) grocery purchases. Our analysis of a panel database that includes transaction details at the consumer level shows that movie-watching is negatively correlated with consumer spending. Furthermore, consumers’ psychological states induced by content and contextual factors moderate the negative effect of movie-watching; after watching a fantasy (as compared to thriller) genre or watching a movie in a less crowded theater, consumers are more likely to make hedonic purchases at the supermarket. These findings provide theoretical and managerial implications for retail operators exploring cross-selling opportunities post-pandemic.

Research Paper Title: Understanding the Externalities of E-Commerce Management in India

Increased internet and cell phone use over the past 20 years has altered how people communicate and conduct business. E-commerce is a new idea and a game changer for businesses everywhere. The e-commerce industry is predicted to develop at a 41% CAGR in India, surpassing USD 103 billion by 2020. The key factors encouraging the expansion of the e-commerce business are the rising use of the internet and smartphones. Favourable demographics and a rising internet user population also contributed to this increase. According to analysis, India is adding three new internet users every second, and by 2020 it expects to have 320 million online buyers, up from approximately 50 million in 2015. It demonstrates how quickly young minds and blood in India are moving toward embracing new technologies. E-commerce expenditure made up 2% of all retail spending in 2015–16 and has grown to be a major force in the development of new markets. By 2020, it is projected to contribute to 4% of the GDP. Its growth is being accelerated by government programs like Make in India, Digital India, Skill India, Start-up India, and Cashless India. However, the rapid expansion of the e-commerce sector and the use of the internet came with several difficulties that needed to be addressed periodically. This paper tries to study the socioeconomic externalities of the e-commerce industry in India considering its current and projected trends. This paper will provide a policy prescription on how government support programs can help the e-commerce sector expand while raising the positive externalities and keeping negative externalities at bay.

The Vaccine Boost: Quantifying the Impact of the COVID-19 Vaccine Rollout on Measures of Activity

This paper investigates the impact of vaccine administration on three main dimensions of activity: spending, mobility, and employment. Our investigation combines two parts. First, we exploit the variation in vaccine administration across states. In panel regressions that include a large set of controls, we find that the rollout has a significant impact on spending, while the results on mobility and employment are mixed. Second, to address concerns of endogeneity, we look at the impact of vaccine lotteries on spending. Using a dynamic event design setting, we find that lotteries have significantly boosted vaccination rates about a week after announcement, with an effect that lasts over the next several days and increases new vaccinations between 3.5 and 5 percent. This boost in vaccination rates, in turn, translates into a significant increase in retail spending, which is larger and somewhat more persistent than what we document in our state-level panel regressions. All told, our findings imply that the vaccine rollout added, on average, 0.5 percentage point to GDP growth in 2021.

INFLUENCE OF TEMPORAL FACTORS ON CONSUMER BUYING BEHAVIOR IN CHAIN SUPERMARKETS IN KENYA.

Purpose: The global retail market is currently a most promising business owing to the growth it is experiencing. In 2016, Kenya's retail spending hit Sh1.8 trillion as the sector expanded by 13 per cent. Chain supermarkets have been growing rapidly over the years attracting local and foreign players. Currently Kenya retail has expanded extensively and is experiencing huge consumer footfalls but dismal sales performance. In a fast-changing world, emerging consumer buying behavior trends require supermarkets to stay close to the consumers. Maximum flexibility in response to dynamic consumer behavior is vital to give the retailers a competitive edge for exploiting such opportunities profitably. The objective of the study was to establish the effect of temporal factors on consumer buying behavior in in supermarkets in Kenya.
 Methodology: The target population consisted of 33 chain supermarkets in Kenya. The target population comprised of 634 employees from these supermarkets. Descriptive research design was used for this study. In addition, regression and correlation analysis was used to link the relationships between the dependent and the independent variables.
 Results: The study found out that there was a positive and significant relationship between temporal factors and consumer buying behavior (r=0.600, p=0.000).
 Unique Contribution to Theory and Practice: It was found out that temporal factors have a positive and significant effect on Consumer Buying Behavior. Therefore, the study recommends for chain supermarkets to provide promotional discounts to consumer so as to increase their business sales. Further, chain supermarkets need to work towards having a corporate brand name renown for high quality brands. Good displays of products are also an added advantage. These insights will enable supermarkets to enjoy benefits of high sales.

Trends in Cigarette Marketing Expenditures, 1975-2019: An Analysis of Federal Trade Commission Cigarette Reports.

With tightened regulations on cigarette marketing and decreased smoking, the major tobacco companies quickly shifted their marketing expenditures in recent decades to maintain profits. We investigated cigarette marketing expenditures in the United States from 1975 through 2019 to examine the trends in cigarette marketing expenditures over the past 45 years. Cigarette marketing expenditure data were obtained from the Federal Trade Commission (FTC) cigarette reports, 1975-2019. Based on individual expenditure categories included in the FTC reports, we created seven aggregate categories for marketing expenditures: Retail; Print; Out of home; Free tobacco products and gifts; Sports, public entertainment, and sponsorships; Telephone and digital; and Other. Dollar amounts and percentages by category were examined to assess trends in marketing expenditures. Cigarette marketing expenditures increased since 1975 and peaked in 2003 at $21.1 billion (adjusted dollars); afterward, they declined dramatically until 2010 and remained stable at around $9 billion through 2019. While all other expenditures decreased, retail expenditures increased, comprising more than 50% of expenditures in 1988 and reaching about 98% in 2019. In the retail category, tobacco companies spent the most on promotional allowances, coupons, and retail-value-added bonuses between 1988 and 2003, after which price discounts dominated retail spending. Overall, cigarette marketing expenditures peaked in 2003 and retail first became the leading category in 1988. Tobacco companies adapted their marketing strategies in retail and allocated most of their retail spending on price discounts since 2003 to lower cigarette prices. The major US tobacco companies directed the bulk of their vast spending on the retail environment since 1988. Moreover, they have dramatically shifted their marketing strategies within the retail category from cigarette advertising before 2003 to customer-directed price discounts since then. This shift may imply a change in focus from recruiting new smokers to retaining current smokers, in response to tax increases and government regulations. Accordingly, restrictions on price-related promotions in retail and nontax strategies should be implemented to counter tobacco companies' marketing efforts in retail.

Online pharmacy boom prompts concern over patient safety

While many industries suffered financial blows during the COVID-19 pandemic, the online shopping market was not one of them. According to the Office for National Statistics, online sales rose to a record high of 33.9% as a proportion of all retail spending in 2020. A report by delivery management company Metapack, published in March 2022, […]

The Effect of Cloud Cover on Consumer Retail Spending: Evidence from Big Data

The Effect of Cloud Cover on Consumer Retail Spending: Evidence from Big Data

Public responses to COVID-19 case disclosure and their spatial implications.

We study how the public changes their mobility and retail spending patterns as precautionary responses to the disclosed location of COVID‐19 cases. To look into the underlying mechanisms, we investigate how such change varies spatially and whether there is any spatial spillover or substitution. We use the daily data of cell phone‐based mobility and credit card transactions between February 10 and May 31 in both 2019 and 2020 in Seoul, South Korea, and employ the empirical approach analyzing the year‐over‐year percent change for the mobility and consumption outcomes. Results report that one additional COVID‐19 case within the last 14 days decreased nonresident inflow and retail spending by 0.40 and 0.65 percentage points, respectively. Then, we also find evidence of spatial heterogeneity: the mobility and retail performances of neighborhoods with higher residential population density were more resilient to COVID‐19 case information while neighborhoods with higher levels of land‐use diversity and retail agglomeration experienced a greater localized demand shock. This heterogeneity is not negligible. For example, one additional COVID‐19 case in neighborhoods in the bottom 20% for population density led to a decline of 1.2 percentage points in retail spending, while other neighborhoods experienced a less negative impact. Finally, we find a significant spatial spillover effect of disclosed COVID‐19 information instead of spatial substitution. One additional COVID‐19 case in geographically adjacent areas within the last 14 days reduced nonresident inflow and retail spending in the subject neighborhood by 0.06 and 0.09 percentage points, respectively.

Towards rebuilding the highstreet: Learning from customers’ town centre shopping journeys

Patronage in town centres has been fluctuating over the past few years, indicating that consumers are buying elsewhere in pursuit of better and more fulfilling shopping experiences. This is concerning as patronage is considered an indicator of high streets vitality and viability. To help understand the changing patterns of patronage, especially related to the growth in online retail spending, this study sheds light on key touchpoints that influence the town centre shopping experience. Using the customer journey framework and drawing insights from datasets of two central UK regions, we provide new contribution to town centre research by capturing significant and specific physical and digital touchpoints in the town centre shopping journey, thus developing our understanding of the determinants of the town centre shopping experience. Consequently, this work provides recommendations for town centre management to help improve town centre patronage by developing customers’ experience with shopping-specific touchpoints.

Where are Global Oil Prices Headed?

Almost all commodity prices recovered in the third quarter of 2020 following steep declines earlier in the year due to the COVID-19 pandemic. Crude oil prices have doubled since their April low, supported by sharp oil supply cuts by OPEC+, but prices remain one-third lower than their pre-pandemic levels. This paper uses a mix of quantitative data; scenario-based economic modeling and posits two scenarios for oil prices. Scenario 1: The first scenario – equally our base case – suggests that oil prices recover strongly as countries begin inoculating their citizens. So far, more than 1.3 billion vaccine doses have been administered worldwide, equal to 17 doses for every 100 people. Meanwhile, the impact of fiscal transfers, wage subsidies and measures to accompany an economic recovery will provide the basis for higher oil demand in 2021, leaving oil prices to oscillate in the $50 - $55/bl. Our optimism rests on the fact that the majority of fiscal and monetary responses will redress the economic shock posed by the virus, while a gradual reopening of borders will support economic activity. Meanwhile, deferred demand and record-low interest rates will support credit growth, consumption, and oil-driven economic activity such as travel and retail spending. Scenario 2: The second scenario is less benign and is a closer reflection of market trends, symptomatic of the exogenous shock posed by COVID-19 and structural shock latent in the energy transition. This scenario outlines the demand implications of current measures singed to attenuate the worst effects of the virus, whilst outlining the implications of a faster transition of renewable energy in a post-COVID scenario. There are numerous challenges associated with forecasting global commodities during such an uncertain tie, for that reason, we relied both on structural trends, such as legislation for carbon neutrality, the extent and implications of fiscal stimulus across advanced economies as well as lessons for post-WWII structural adjustment.

Panic Buying and Consumption Displacement during COVID-19: Evidence from New Zealand

Panic buying and hoarding behavior is a significant component of crisis- and disaster-related consumption displacement that has received considerable attention during the COVID-19 pandemic. Understanding such purchasing and stockpiling behavior provides critical information for government, disaster managers and the retail sector, as well as policy makers to adjust crisis response strategies and to better understand disaster management, including preparedness and response strategies. This study examines consumer purchasing behavior, retail spending and transactional data for different retail sectors between January 2017 and December 2020 using data for the greater Christchurch region in New Zealand. Once COVID-19-related panic buying began, overall spending increased sharply in anticipation of lockdowns. Transactional spending increased and subsided only slowly to a level higher than pre lockdown. The magnitude of the panic buying event far exceeded historical seasonal patterns of consumer spending outside of Christmas, Easter and Black Friday, although daily spending levels were comparable to such consumption events. The results of the study highlight the importance of comparing panic buying to other events in terms of purchasing motivations and also considering that so-called panic buying may contribute to greater individual and household resilience. The volume of sales alone is not adequate to define panic buying. Instead, the extent of divergence from the normal daily spending value per retail transaction of a given population provides a much more accurate characteristic of panic buying.

Die verplasing van studente se kleinhandelbesteding in gasheerstede weens Covid-19: 'n Gevallestudie

Die ekonomiese waarde van studente se besteding in die dorpe en stede waar hul universiteite geleë is, word in hierdie studie, in die lig van die COVID-19-pandemie, ondersoek. Die studie is uniek deurdat dit 'n universiteitskampus in 'n landelike omgewing as gevallestudie bestudeer. Die tendens is dat studentegetalle, afkomstig van buite die grense van die plaaslike ekonomie, deurentyd styg. Dit het 'n positiewe impak op die ekonomiese aktiwiteite van die gasheerstad en bevoordeel ondernemings as gevolg van studente se bestedingspatrone. Besteding deur voltydse kontakstudente is besonder voordelig vir die kleinhandelsektor in die gasheerstad. Owerheidsinperkings op beweging wat ingestel is om die verspreiding van die koronavirus te verhoed, het hierdie besteding tydelik beëindig en die plaaslike ekonomie nadelig beïnvloed. Die beperkings op die beweging van studente lei tot die verplasing van studentebesteding, weg vanaf die gasheerstad, met 'n kosteverlies vir die kleinhandelsektor van gemiddeld nagenoeg R2 miljoen per dag. Die lengte van die inperking op die normale werking van die universiteit kan dus oor die langer termyn 'n wesentlike effek op die plaaslike kleinhandelmark van die gasheerstad hê, met verlore werksgeleenthede en die sluit van besighede as 'n realiteit. Die onderskeie tipes bestedingsverplasings wat in die literatuur met rampe geassosieer word, word uitgelig. Die resultate is nie net van toepassing gedurende die viruspandemie nie, maar toon ook aan wat die negatiewe permanente langtermynimpak op die plaaslike ekonomie kan wees, indien universiteitsbesture die strategiese besluit sou neem om kontakonderrig permanent met aanlyn onderrig te vervang.

Public Responses to COVID-19 Case Disclosure and Their Spatial Implications

During the COVID-19 pandemic, a few countries chose to disclose detailed location information of cases, along with mass testing and contact tracing, rather than a lockdown policy. In this paper, we study public responses to this information by using daily mobility and credit card transaction data in Seoul, South Korea. We first find that the disclosure of COVID-19 cases led to localized demand shock as both non-resident inflow and retail spending decreased significantly in neighborhoods with more cases. However, public responses to the disclosed information of cases do not appear to be homogenous across neighborhoods. Neighborhoods with higher employment density and land use diversity experienced a higher demand shock while mobility and retail performances of those with higher population density were less affected by COVID-19 incidences. Also, those with higher retail agglomeration were less resilient to the localized shock of COVID-19 case information potentially due to public concerns on the virus spread. Finally, we find a significant spatial spillover effect of disclosed COVID-19 information instead of spatial substitution. An increase in COVID-19 risks in both geographically and functionally adjacent areas reduced non-resident inflow and retail spending in the subject neighborhood. Results provide important spatial implications for localized economic resilience during and after the pandemic that differs from natural disasters and economic crisis.

The influence of oil and natural gas employment on local retail spending: evidence from Oklahoma panel data

Recent volatility in oil and natural gas markets has led to questions about how local businesses and government revenues might be affected. This paper uses a panel dataset of Oklahoma counties during 2003–2012 to quantify the relationship between changes in oil and natural gas employment and retail spending. One particularly noteworthy contribution is the use of sub-categories of retail sales (to the two-digit Standard Industrial Classification code) to assess whether specific retail sectors are more responsive to changes in oil and gas activity. Our fixed effects panel regression model reveals that variations in mining employment impact aggregate retail expenditures, with an overall elasticity of 0.02. These results are driven by the grocery and furniture sectors, with elasticities of 0.05–0.06, and are even stronger when the analysis is limited to counties considered to be mining-dependent. We also show that spillover effects exist, with the grocery and furniture expenditures highly impacted by mining employment in neighboring counties as well as their own.

From Transactions Data to Economic Statistics: Constructing Real-time, High-frequency, Geographic Measures of Consumer Spending

Access to timely information on consumer spending is important to economic policymakers. The Census Bureau's monthly retail trade survey is a primary source for monitoring consumer spending nationally, but it is not well suited to study localized or short-lived economic shocks. Moreover, lags in the publication of the Census estimates and subsequent, sometimes large, revisions diminish its usefulness for real-time analysis. Expanding the Census survey to include higher frequencies and subnational detail would be costly and would add substantially to respondent burden. We take an alternative approach to fill these information gaps. Using anonymized transactions data from a large electronic payments technology company, we create daily estimates of retail spending at detailed geographies. Our daily estimates are available only a few days after the transactions occur, and the historical time series are available from 2010 to the present. When aggregated to the national leve l, the pattern of monthly growth rates is similar to the official Census statistics. We discuss two applications of these new data for economic analysis: First, we describe how our monthly spending estimates are useful for real-time monitoring of aggregate spending, especially during the government shutdown in 2019, when Census data were delayed and concerns about the economy spiked. Second, we show how the geographic detail allowed us quantify in real time the spending effects of Hurricanes Harvey and Irma in 2017.