LOGINIs Gamestop's traffic up? Is Jimmy John's traffic growing more than Subway's?
Every day some new analysis of cellphone location data portrays to measure the exact foot traffic in one or all of these, and every day we emit a collective gasp at the incredulous claims.
Let's get this quickly out of the way: Gamestop traffic is trending down; Jimmy John is down too and that trend has not changed for 3 years straight; it's also worse than Subway's downward trend, except for some bright, but inconsistent, spots in 2019.
• Gamestop:
• Jimmy John's (blue) vs Subway (pink):
But that's only the beginning of the story.
First, it is a disservice to the reader to portray that any dataset, and in particular cellphone location data, can estimate within a fraction of a percentage point the actual traffic of a company. With extremely detailed geofencing work, taking into account the hours of operation of every single location, and after testing hundreds of normalizations versus the actual revenue data and versus our partner's (Consumer Edge) credit & debit card transaction data, our research team at Advan can come close. We strive to be approximately right, instead of precisely wrong, as Warren Buffet said.
Second, the actual claims we have been hearing are completely off the mark. Gamestop's traffic for example -- and we have nothing against the company, these are the fundamentals talking -- is down. About 6% down year over year in Q2 2019 in fact, and not looking better in Q3. There are no two ways about it (if you insist on exact numbers, then 6.04% down, but remember, this is approximate).
Jimmy John's is doing better than Subway in 2019 (comparatively speaking; Subway has 13x the traffic), but that trend has started running out of steam in the first 2 weeks of October. Here's hoping it's just a small aberration. More worryingly though, if you go back to 2018 and 2017 the 2 chains' traffic is changing at the same rate, and that rate is downward trending in both cases. Not a bullish sign.
So please, do not believe everything you read without confirming how the analysis was performed. Consider placing more weight on analytics performed by the experts in crunching and normalizing location data for financial performance. Data is good; but incorrect and misleading data is worse than no data.
