Retail Customer Reactions to Private Equity Acquisitions

We study short-term changes in customer visits to retail outlets around the announcement of private equity (PE) acquisitions, using aggregated and anonymized mobile phone data covering approximately ten percent of all mobile devices in the United States. Given the monthly frequency of the data, we can separate the announcement reaction of customers from the effect on operational improvements, which can only take place after the completion of the acquisition. There is a significant reduction in customer visits in retail outlets immediately following a PE acquisition. The decrease in visits is larger for larger PE firms and those previously involved in more lawsuits. The customer reaction also varies depending on income level, stock market participation, and self-employment rate, as well as religious and political orientation of the outlet location. It also depends on local competition.