Ep. 195 Do Election Years Affect Retail Sales?
With 2024 in our sights, we’re not far off from the next round of presidential elections. One of our Master Shopkeepers members, Julie, recently asked if I could share any insights into this question: “do election years affect retail sales?”
There are many small business owners—and in particular, independent retail store owners—who firmly believe that retail sales dip in presidential election years. In a recent poll on my Instagram stories, more than ⅔ of respondents said that retail sales go down in election years.
As I’ve discussed on the podcast before, though, it’s critical to make business decisions based on data and facts, not emotion (and definitely not based on word of mouth or rumors!).
Read on to learn what the data shows about election years affecting retail sales.
What the Stats Tell Us: Do Election Years Affect Retail Sales?
Shoutout to my husband for helping me pull the following data from Statista, an online platform specializing in data gathering.
I wanted to compare total US retail sales the year before the presidential elections versus total US retail sales in the year of the presidential elections. “Total US retail sales” includes ALL retail sales in the US, not just independent retail.
Here are the results:
In 2019, total US retail sales were 5.4 trillion dollars. In 2020, the year of the last presidential election, total US retail sales were 5.5 trillion dollars. Total US retail sales increased by half a trillion dollars in the election year.
When comparing 2015 to 2016 (the election year prior), retail sales increased, too. The same is true when you compare 2011 and 2012.
The election year prior to 2012 was 2008. Retail sales decreased in 2008 compared to 2007, but this was also the year of the Great Recession. Both years, though, had over 3.9 trillion dollars in sales, so the decrease wasn’t as large as you might expect.
So, do retail sales decline in election years?
The answer for the past 3 elections is NO. That’s what the historical data shows.
Source link: https://www.statista.com/statistics/197576/annual-retail-sales-in-the-us-since-1992/
How Retail Sales Have Changed in More Recent Years
The past few years have been mired by the COVID-19 pandemic and its effects.
Statista reports that “by the end of 2022, total retail sales reached approximately 7.1 trillion U.S. dollars, around half a billion U.S. dollar increase from the year before.
Retail sales have steadily increased since 2009, as the economy recovered from the downward trend due to the recession following the 2007-2008 financial crisis, and most recently from the impact of the coronavirus (COVID-19) crisis.”
Of course, the past doesn’t always determine the future. I’m not guaranteeing retail sales will grow again in 2024!
But when I look at the data, I am optimistic. We’ll just have to see what 2024 brings.
Why Retailers Believe That Sales Dip in Election Years
So, why do retailers believe retail sales dip in election years?
I think it’s for two reasons.
First, negativity breeds more negativity, especially among independent retail store owners. It can be so frustrating when this happens—as if running our own businesses isn’t hard enough! One person will say it, and then it snowballs from there.
Second, media outlets and social media thrive off of click-bait articles. Sensational headlines get people clicking, of course. But I wonder how many people actually read the articles, rather than letting the titles just confirm what they already believe.
By no means am I suggesting ALL journalists or publications are doing this, or even doing it intentionally.
Here’s an example from Retail Brew, a reputable retail news source: Consumers Historically Pull Back Spending After an Election. How Should Retailers Prepare?
That title easily grabs an independent retailer’s attention! And if they already BELIEVE sales decrease in election years, the title could quickly validate their belief.
However, if you read the full article, you’ll find that it talks about how the buying patterns of consumers change during election seasons.
I did tons of research for this episode because it was important to me to know the truth. I scoured many articles and did dozens of Google searches. It took a long time to finally find a Forbes article titled: Presidential Elections Do Not Deter Holiday Shoppers In The Long Run.
Finally, an article with a title aligned with the FACTS.
Both articles had similar messaging: the shopping habits of consumers dip and change around election time.
But neither article indicates that retail sales decrease overall.
So…Do Election Years Affect Retail Sales?
In short, yes.
Historically, election years do affect retail sales, but only for short periods of time or in patterns. Retail sales are not affected overall, and certainly not year-over-year.
What You, an Independent Retail Store Owner, Can Control
So why are sales patterns affected during election years?
I think most of us know. We’re human, right?!
We all know how much media people consume in the months leading up to an election. Unfortunately, we can’t control the media or social media, nor can we control the thoughts and emotions of everyone in the US.
As a shopkeeper, you can control your thinking and your planning. Knowledge is power! We’ll definitely be discussing and brainstorming creative ideas for 2024 in Master Shopkeepers.
Now is the time to consider what you can do to set yourself, your mind, and your store up for success in 2024.
Resources
- Free resource: Open a Brick and Mortar Store Checklist
- Ep. 149: Lighten Your Mental Load by Making Data-Driven Decisions
- Ep. 59: Metrics and Benchmarks for a Successful Retail Business
- Ep. 79: Are Your Personal Opinions Hurting Your Retail Business?
Timestamps
- [02:17] What the Stats Tell Us: Do Election Years Affect Retail Sales?
- [06:06] How Retail Sales Have Changed in More Recent Years
- [07:13] Why Retailers Believe That Sales Dip in Election Years
- [11:19] So…Do Election Years Affect Retail Sales?
- [12:39] What You, an Independent Retailer, Can Control
Connect With Kathy
Kathy Cruz is a brick and mortar store owner and retail coach. She helps shopkeepers work less, profit more, and grow their brick and mortar businesses through her podcast, quiz, and retail coaching mastermind.
Website: www.savvyshopkeeper.com | Instagram: @savvyshopkeeper
