Shopping Centers Today is the news magazine of the International Council of Shopping Centers (ICSC)
Issue link: https://sct.epubxp.com/i/58695
But important as demographic trends are, Johnson is keeping his eye on anot h er aspect of economet- ric data: energ y prices. Some analysts were predict- ing at press time that gasoline prices could cession. "If you look back at the reces- sion, the people who were hit the worst clearly tended to be young people," said Craig Johnson, founder of retail con- sultant firm Customer Growth Part- ners. "And their unemployment rates continue to be the highest." hit $5 per gallon by Memorial Day. Johnson, who crunched 40 years of data on energy prices and economic activ- ity, says this could spell big trouble for retail. By his calculations, rising energy prices, gasoline in particular, are all but synonymous with U.S. recessions. 2000–2001 2001–2002 Average number of visits per month Duration (in minutes) Total duration per month (in minutes) Total spending per mall visit* Department stores Mall shops Food Total spending per month** 3.4 78.1 265.5 $75.10 $35.90 $37.40 $4.70 $255.34 3.3 75.1 247.8 $71.90 $34.10 $35.50 $4.10 $237.27 Selected shopping patterns 2003 2004 3.2 82.2 263.0 $83.30 $36.00 $42.20 $5.90 $266.56 * Includes spending not separately shown (average). ** Average mean spending per month equals dollars spent per visit multiplied by the mean number of visits. 38 SCT / JANUARY 2012 2.9 80.6 233.7 $86.30 $42.50 $40.10 $5.40 $250.27 "Five of the last six recessions have 2005–2007 3.0 78.5 235.5 $98.40 $47.90 $46.90 $6.50 $295.20 all occurred when the combined cost of all forms of energy exceeded 6 cents of the consumer dollar," Johnson said. "You can't say it's a causal relationship, but the correlation is strong. Energy has historically averaged between 4.5 and 5.5 percent of consumer expenditures. We are now at 6.2 percent, or right at the tipping point." If energy prices stay at elevated levels for months at a time, shopper patterns will change again — and not in ways that help malls, Johnson says. "Rising energy prices have a macro impact on consumer demand by reduc- ing the dollars spent from effective dis- posable income," he said. "You're still going to go to Kroger and Safeway, in other words, but discretionary spend- ing at the mall takes a disproportion- ate hit." Shoppers will favor instead such one-stop mec- cas as Walmart and Costco, and they will also buy more 2010 3.0 89.4 268.2 $105.60 $36.90 $68.80 $8.10 $316.80 SOURCE: ICSC RESEARCH