The question every client is asking, how bad is it? Well, after tracking a week of consumer traffic data, we are now ready to dig in and try to answer that question.

First, the good news. Local government organizations across Texas have come together to help each other out in a time of need. We are sharing data, resources, and emergency continuity plans. Once again, Texas is shining during a disaster. But as managers and local government professionals we know the impact of COVID-19 will be lasting both in the near and long term. Over the last twenty years, we have performed pandemic table top exercises preparing for this day, and although we may have gotten a rough start, we have followed the plan

Here's what we know

In the areas of Texas where social distancing limitations started occurring last week, consumer traffic is showing 25-45% decreases. We can’t show an exact correlation between consumer traffic and sales tax revenue, but one can make a reasonable assumption that severe double-digit percentage drops will occur in industries related to retail traffic.

For projection purposes, cinemas and other entertainment users should be zeroed out on a week-by-week basis. Restaurants that still allow inside dining will show decreases greater than 30%, and restaurants that have moved to delivery, takeout, and curbside will show decreases of at least 50%. These assumptions are based on data that comes from the new ZacRT (real-time) system and conversations with numerous business owners in the retail, restaurant, and entertainment sectors.

The only bright spot in sales tax revenue will be with grocery and home essentials. These retailers are seeing large upticks in traffic. We have recorded 30-45% increases in traffic at most major grocers, at some home improvement locations, and we expect the same level of increases with online orders. We can thank our lucky stars for the Wayfair decision, as the revenue driven by online orders will help soften the blow slightly.