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Against the backdrop of what remains a challenging time for full-service restaurants (FSRs), we dove into the data to check in with three of America’s leading FSR chains – First Watch, Texas Roadhouse, and Applebee’s. How did they fare in Q2 2024? And what lies in store for them in the months ahead?
First Watch has emerged as a rising star in recent years, rapidly expanding its footprint while at the same time taking pains to preserve the feel of a small, local eatery. The restaurant is nimble on its feet – growing its audience through a strategy centered on continual menu innovation and special seasonal offerings.
In the past year alone, First Watch added dozens of new locations to its fleet. And foot traffic data shows that the chain’s aggressive growth strategy is meeting robust demand. In Q2 2024, YoY visits to First Watch grew by 16.0%, far outperforming FSR and diner & breakfast chain averages. And perhaps more importantly, the average number of visits to each individual First Watch restaurant rose 5.8% over the same period.
Texas Roadhouse is another chain that has been crushing it in 2024 – and not just on Father’s Day. Over the past year, the popular steakhouse opened some 30 new U.S. locations, and plans to continue expanding this year.
And foot traffic data shows that Texas Roadhouse’s high-quality, affordable offerings are resonating with consumers. Despite inflation-driven price hikes, YoY visits to the chain have continued to grow. And though some of this increase is due to the restaurant’s expansion, the average number of visits per location has also been on the rise: Between January and June 2024, Texas Roadhouse experienced near-consistent YoY visit and visit-per-location growth. Only in January and in April did visits per location falter, likely due to January’s inclement weather and an April Easter calendar shift.
On a quarterly basis, too, foot traffic to Texas Roadhouse increased 6.2% in Q2 2024 – significantly outpacing averages for both steakhouses (2.6%) and full-service restaurants (1.2%).
Like many full-service restaurants, Dine Brands’ Applebee’s has faced its share of headwinds in recent years. Over the past 12 months, Applebee’s shuttered at least 30 locations, contributing to a drop in the chain’s overall foot traffic. But analyzing changes in the average number of visits to each Applebee’s restaurant shows that the closures may actually be helping to put Applebee’s back on a firmer footing.
In Q2 2023, visits to Applebee’s nationwide declined 3.7% YoY, while the average number of visits per location dropped 2.7%. Since then, the chain’s YoY visit gap has narrowed – while the average number of visits per location has begun to increase. And in Q2 2024, Applebee’s closed its overall YoY visit gap and grew its visits per location by 2.3%. Though the chain has yet to return to positive unit growth, the rightsizing of its fleet appears to be bolstering Applebee’s remaining stores – positioning it for long-term success.
Full-service restaurants have had a tough time in recent years, and concerns that consumer spending may moderate as the year wears on continue to weigh on the industry. Still, foot traffic data suggests that consumers are once again visiting restaurants – fueling expansion for First Watch and Texas Roadhouse, and helping shore up Applebee’s long-term prospects.
What does the rest of 2024 have in store for restaurant chains?
Follow Placer.ai’s data-driven restaurant analyses to find out.
Albertsons Companies, Inc. is one of the country’s largest grocery holding companies. The company operates various well-known grocery banners, including Albertsons, Safeway, Jewel-Osco, and Shaw's Supermarket.
We examined the visit performance of some of the brand’s major banners to see how they are faring as the second half of the year gets underway.
Albertsons Companies, Inc. operates over 2,200 stores across 36 states, and Safeway, with 918 stores, is the company’s largest banner by far. Unsurprisingly, Safeway also pulls in the greatest share of visits, accounting for 44.5% of foot traffic to Albertsons brands between January and June 2024. Albertsons and Jewel-Osco banners, with 379 and 188 stores, respectively, accounted for 17.9% and 10.7% of all visits to the company’s portfolio in H1 2024. The remaining 27.6% of visits went to smaller brands, including VONS (8.5%), ACME Markets (5.7%), and Shaw’s Supermarket (4.7%).
A look at recent visits to some of Albertsons' major banners shows that the brand has fared well in a period noted for value grocery dominance. Though Albertsons brands fall squarely into the traditional grocery store category, its banners experienced near-consistent YoY visit growth in H1 2024, with June 2024 visits between 5.7% and 11.7% higher than they were in June 2023.
Recognizing the increased focus among grocery shoppers on value, Albertsons has been enhancing its loyalty program, initially launched in 2021 and revamped in April 2024. The new "Albertsons for U" program unified its points currency while adding new perks, including discounts on groceries and gas for enrolled members. And the program seems to be spurring shoppers to do their weekly shopping at the company’s various banners.
The percentage of visits to Albertsons banners made by customers visiting a chain at least four times in a month increased each year analyzed. For example, in June 2022, 54.8% of Safeway visits came from shoppers who visited the chain at least four times during the month; by June 2024, that number increased to 56.3%. Similarly, the share of visits to Jewel-Osco from weekly shoppers increased from 54.8% to 57.1% over the same period. These patterns repeated at Shaw's Supermarket, ACME Markets, United Supermarkets, VONS, and Tom Thumb.
The rise in loyalty rates across all banners indicates that Albertsons’ focus on enhancing customer experience and engagement has paid off. As the chain continues to lay the groundwork for its planned merger with Kroger, its increasingly loyal customer base will remain a powerful asset.
Albertsons remains one of the most dominant grocery holding companies in the country, and its banners have maintained strong yearly growth, both in terms of visits and loyalty.
Will visits to Albertsons brands continue to grow into the second half of the year?
Visit Placer.ai to keep on top of the latest grocery insights.
Professional sports rank among the most profitable industries for sponsorships and brand partnerships. These partnerships, such as Nike's collaboration with the NFL or Coca-Cola's long-standing relationship with the Olympics, offer immense value through enhanced brand visibility and increased consumer engagement.
Today, we took a look at two sports partnership agreements – one between DICK’s Sporting Goods and the Boston Celtics and Red Sox, and another between BIGGBY COFFEE and the Detroit Tigers – to explore the impact of these deals.
DICK’s Sporting Goods recently announced a major partnership with Boston’s beloved Celtics (NBA) and Red Sox (MLB) teams. The partnership was announced shortly after the grand opening of Boston’s new DICK’s House of Sport venue at 760 Boylston Street – which was attended by Red Sox and Celtics legends like David Ortiz and Larry Bird. In addition to signage and logo placement at TD Garden and Fenway Park, the deal grants DICK’s IP rights to be used locally, both in the House of Sport and online.
A look at cross-visitation patterns between DICK’s Sporting Goods and TD Garden and Fenway Park shows that this partnership is likely to be beneficial to both sides. The share of stadium visitors that also visited DICK’s Sporting Goods (nationwide) rose in May and June 2024, outpacing last year’s levels. And a respective 35.4% and 23.9% of visitors to DICK’s new local House of Sport in May and June 2024 also visited Fenway Park and TD Garden – more than the share that visited other major Boston landmarks like Faneuil Hall.
Comerica Park in Detroit, Michigan, which hosts the Detroit Tigers baseball team, launched a partnership with Michigan-based BIGGBY COFFEE in 2023.
Since the partnership began, there has been a noticeable rise in visits to local BIGGBY COFFEE locations. During the 2023 baseball season, visits per location to BIGGBY COFFEE in the Detroit area were 6.3% higher than during the 2022 season – while nationwide visits per location to the chain dropped slightly compared to the previous year, with 0.3% fewer visits than in 2022%.
Similarly, the share of Comerica Park visitors frequenting a BIGGY COFFEE location at least once during the baseball season increased after the sponsorship deal. In 2022, 21.7% of visitors to Comerica Park also visited a BIGGBY; by 2023, this share increased to 25.8%.
The marriage of sports and sponsorships is a long-standing one – and harnessing location analytics can help sports leagues and teams find partnerships that resonate with sports fans.
For more data-driven marketing insights, visit Placer.ai.
We’ve discussed the meteoric rise of warehouse clubs, particularly in relation to their mass merchant counterparts so far in 2024. Clubs continue to provide all three components of what makes retail successful today; unique products, value and a positive in-store experience. And as we previously highlighted, each club has its unique value proposition that drives engagement with its members.
A few weeks ago, at the Bank of America London Investor Conference, Walmart CFO John David Rainey, spoke about the growth of Sam’s Club and the relationship between that growth and Millennials and Gen Z cohorts. He mentioned that those two groups represent the highest level of growth to the Sam’s Club business, and logically, against the backdrop of changes across the retail industry, this makes sense. As this group ages into the family formation life stage, their retail needs change, and coupled with migration patterns since the pandemic, most likely more space means more bulk.
Using Placer’s foot traffic estimates and Experian Mosaic lifestyle cohorts, we compared the first six months of 2019 to the first six months of this year to determine if this trend also was reflected in consumer visits. Costco showed a 50-basis-point increase in visits from trade areas with a higher percentage of Singles and Starters and Promising Families, both groups that align with Millennial and Gen Z life stages. Those cohorts also represented the highest levels of change over the five years of any group of Costco trade area constituents.
Sam’s Club tells a similar story, if not one that is even more compelling. Singles & Starters, as of 2024, represented the highest percentage of visitors, and increased 80 basis points from 2019. Promising Families also increased by 20 basis points over the same period, while many segments of more mature consumers declined in percentage over the five year period. Both Sam’s Club and Costco have grown visits so far in 2024, and it’s likely that the growth is being fueled by younger shoppers.
Migration from urban environments to more suburban and rural areas as well as aging into larger spaces both could play a role in the growth in popularity of warehouse clubs by younger consumers. This sector of retail relies on, and greatly benefits from loyalty, and getting buy-in from elusive younger consumers can provide some more long-term stability for Sam’s Club and Costco. With Costco’s announcement this week that it will be raising prices on memberships for the first time since 2017, focusing on those newer, younger members with higher earning potential may help to alleviate some of the pressure. Younger visitors may be enticed by the food court, stocking up on essentials or impulsive items, and warehouse clubs are welcoming this next wave of consumers through their doors.
Food retail’s “Battle Royale” officially moved on to its next round with the introduction of McDonald’s $5 Meal Deal on June 25. We’ve previously discussed how value-oriented grocers have disrupted McDonald’s and the broader QSR category and how casual dining chains shot the first shots in this summer’s value wars with extreme value offerings, but given McDonald’s reach, we wanted to take a closer look at this promotion and its ripple effect across the food retail landscape.
The Placer Blog looked at the impact of several recent limited time offers across the restaurant industry this week, but we thought we’d specifically look at McDonald’s and its direct competitors. After slower year-over-year visitation trends during April and the first half of May, we saw much stronger trends across the QSR category in June, especially those with bundled meal promotions like Jack in the Box, Wendy’s, Arby’s, and Burger King. McDonald’s visits actually declined year-over-year during the first week of the $5 Meal Deal promotion, but that was more of a function of lapping last year’s viral Grimace Shake promotion (the strength of the year-over-two-year visit trends below also supports this). Last week’s visitation trends accelerated on both a one- and two-year basis, reinforcing how important value is for driving visits for QSR consumers.
While consumers have responded positively to McDonald’s and other QSR chains’ bundled value promotions, we’ve yet to see a material impact on grocery visits over the same time period (both value and conventional grocers continue to see positive year-over-year growth). To us, there are probably a few reasons for this: (1) grocery stores have also been promotional over the corresponding period, something we’ve called out a few times the past few months; (2) consumers are still shopping a wider number of total food retail locations as they seek out deals and have incorporated QSR bundled value meals into their current shopping behavior; and (3) distortion in year-over-year numbers due to last week’s 4th of July holiday (which saw strong year-over-year visit trends).
As inflation continues to squeeze household budgets, restaurants are turning to limited-time offers (LTOs) to attract cost-conscious consumers. These promotions help create buzz among patrons and drive foot traffic.
We take a closer look at several dining chains – Buffalo Wild Wings, Starbucks, Chili’s, and McDonald’s – to see how their recent LTOs were received by diners.
Buffalo Wild Wings is no stranger to limited-time offers – the chicken-centric restaurant gave away free chicken wings after this year’s Superbowl went into overtime, marked National Beer Day with $5 beers, and offered a whole slew of March Madness deals.
The chain’s recently introduced LTO – unlimited boneless wings every Monday and Wednesday for just $19.99 – launched on May 13th, and is slated to run through July 10th, 2024. And comparing visitation patterns during the seven-week period immediately following the launch (May 12th - June 29th, 2024) to those during the seven-week period preceding the launch (March 24th - May 11th, 2024), shows just how well-received this LTO has been.
Foot traffic to Buffalo Wild Wings rose 8.1% immediately after the launch, largely due to outsized Monday and Wednesday visit increases of 45.6% and 49.3%, respectively. And during the seven-week period following the introduction of the LTO, the chain’s share of Monday visits shot up from 9.1% to 12.3%, while its share of Wednesday visits increased from 10.2% to 14.1%.
Starbucks has been leaning into value offerings – and in addition to its new “pairings” menu, the coffee giant also rolled out a limited-time 50% Friday discount exclusively for app users, which began on May 10th, 2024 and lasted through the month. Analyzing Starbucks’ visitation patterns shows that the promotion led to a significant increase in Friday foot traffic at Starbucks locations nationwide.
Compared to the year-to-date average, visits to Starbucks on Fridays following the launch experienced a noticeable increase in visits. Where the visits to Starbucks on Friday May 3rd, before the promotion launched, were 1.1% lower than the year-to-date (YtD) Friday visit average, visits on May 10th – when the promotion launched – jumped by 20.0% above the YTD visit average.
This special, which excluded hot brewed coffee and tea, seems to have met people’s desires for a refreshing afternoon or pre-weekend pick-me-up.
On April 29th, 2024, Chili's Grill & Bar revamped its "3 for Me" menu, which offers customers a customizable three-course meal at a value price – and weekly YoY visits to Chili’s have been strongly elevated ever since. Even before the updated menu roll out, YoY foot traffic to Chili’s was largely positive, reaching 8.6% in the week of April 1st, 2024. But since the kickoff, YoY visits have remained consistently higher – and have yet to taper off.
In addition to Chili’s new Big Smasher Burger, another menu item that seems to be driving excitement is its chicken sandwich – an offering that tends to increase foot traffic wherever it shows up.
McDonald’s has also been a leader at boosting visits by offering limited edition sauces, drinks, and deals. And the chain’s most recent LTO leans hard on consumers’ recent affinity for value. On June 25th, 2024, the chain announced a $5 Meal Deal, which includes a McDouble or McChicken, 4-piece Chicken McNuggets, small fries, and a small soft drink.
These deeply discounted prices are likely to be particularly appealing to customers against the backdrop of McDonald’s rising menu prices, which have been significantly impacted by inflation. Indeed, foot traffic to the chain jumped following the $5 special launch, with visits to McDonald’s exceeding year-to-date daily visit averages.
The Tuesday of the launch – June 25th – was McDonald’s busiest Tuesday of the year thus far (outpaced since by July 2nd), drawing 8.0% more visits than the year-to-date Tuesday average. And similar patterns repeated across all days following the launch, signifying how well-received this special has been among McDonald’s fans.
The foot traffic boosts provided by these limited-time-offers prove that, in times of inflationary pressure, a good deal can continue to bring visitors into a fast-food spot.
How will the dining value wars continue to play out in the months ahead?
Visit Placer.ai to find out.
New York City is one of the world’s leading commercial centers – and Manhattan, home to some of the nation's most prominent corporations, is at its epicenter. Manhattan’s substantial in-office workforce has helped make New York a post-pandemic office recovery leader, outpacing most other major U.S. hubs. And the plethora of healthcare, service, and other on-site workers that keep the island humming along also contribute to its thriving employment landscape.
Using the latest location analytics, this report examines the shifting dynamics of the many on-site workers employed in Manhattan and the up-and-coming Hudson Yards neighborhood. Where does today’s Manhattan workforce come from? How often do on-site employees visit Hudson Yards? And how has the share of young professionals across Manhattan’s different districts shifted since the pandemic?
Read on to find out.
The rise in work-from-home (WFH) trends during the pandemic and the persistence of hybrid work have changed the face of commuting in Manhattan.
In Q2 2019, nearly 60% of employee visits to Manhattan originated off the island. But in Q2 2021, that share fell to just 43.9% – likely due to many commuters avoiding public transportation and practicing social distancing during COVID.
Since Q2 2022, however, the share of employee visits to Manhattan from outside the borough has rebounded – steadily approaching, but not yet reaching, pre-pandemic levels. By Q2 2024, 54.7% of employee visits to Manhattan originated from elsewhere – likely a reflection of the Big Apple’s accelerated RTO that is drawing in-office workers back into the city.
Unsurprisingly, some nearby boroughs – including Queens and the Bronx – have seen their share of Manhattan worker visits bounce back to what they were in 2019, while further-away areas of New York and New Jersey continue to lag behind. But Q2 2024 also saw an increase in the share of Manhattan workers commuting from other states – both compared to 2023 and compared to 2019 – perhaps reflecting the rise of super commuting.
Commuting into Manhattan is on the rise – but how often are employees making the trip? Diving into the data for employees based in Hudson Yards – Manhattan’s newest retail, office, and residential hub, which was officially opened to the public in March 2019 – reveals that the local workforce favors fewer in-person work days than in the past.
In August 2019, before the pandemic, 60.2% of Hudson Yards-based employees visited the neighborhood at least fifteen times. But by August 2021, the neighborhood’s share of near-full-time on-site workers had begun to drop – and it has declined ever since. In August 2024, only 22.6% of local workers visited the neighborhood 15+ times throughout the month. Meanwhile, the share of Hudson Yards-based employees making an appearance between five and nine times during the month emerged as the most common visit frequency by August 2022 – and has continued to increase since. In August 2024, 25.0% of employees visited the neighborhood less than five times a month, 32.5% visited between five and nine times, and 19.2% visited between 10 and 14 times.
Like other workers throughout Manhattan, Hudson Yards employees seem to have fully embraced the new hybrid normal – coming into the office between one and four times a week.
But not all employment centers in the Hudson Yards neighborhood see the same patterns of on-site work. Some of the newest office buildings in the area appear to attract employees more frequently and from further away than other properties.
Of the Hudson Yards properties analyzed, Two Manhattan West, which was completed this year, attracted the largest share of frequent, long-distance commuters in August 2024 (15.3%) – defined as employees visiting 10+ times per month from at least 30 miles away. And The Spiral, which opened last year, drew the second-largest share of such on-site workers (12.3%).
Employees in these skyscrapers may prioritize in-person work – or have been encouraged by their employers to return to the office – more than their counterparts in other Hudson Yards buildings. Employees may also choose to come in more frequently to enjoy these properties’ newer and more advanced amenities. And service and shift workers at these properties may also be coming in more frequently to support the buildings’ elevated occupancy.
Diving deeper into the segmentation of on-site employees in the Hudson Yards district provides further insight into this unique on-site workforce.
Analysis of POIs corresponding to several commercial and office hubs in the borough reveals that between August 2019 and August 2024, Hudson Yards’ captured market had the fastest-growing share of employees belonging to STI: Landscape's “Apprentices” segment, which encompasses young, highly-paid professionals in urban settings.
Companies looking to attract young talent have already noticed that these young professionals are receptive to Hudson Yards’ vibrant atmosphere and collaborative spaces, and describe this as a key factor in their choice to lease local offices.
Manhattan is a bastion of commerce, and its strong on-site workforce has helped lead the nation’s post-pandemic office recovery. But the dynamics of the many Manhattan-based workers continues to shift. And as new commercial and residential hubs emerge on the island, workplace trends and the characteristics of employees are almost certain to evolve with them.
The restaurant space has experienced its fair share of challenges in recent years – from pandemic-related closures to rising labor and ingredient costs. Despite these hurdles, the category is holding its own, with total 2024 spending projected to reach $1.1 trillion by the end of the year.
And an analysis of year-over-year (YoY) visitation trends to restaurants nationwide shows that consumers are frequenting dining establishments in growing numbers – despite food-away-from-home prices that remain stubbornly high.
Overall, monthly visits to restaurants were up nearly every month this year compared to the equivalent periods of 2023. Only in January, when inclement weather kept many consumers at home, did restaurants see a significant YoY drop. Throughout the rest of the analyzed period, YoY visits either held steady or grew – showing that Americans are finding room in their budgets to treat themselves to tasty, hassle-free meals.
Still, costs remain elevated and dining preferences have shifted, with consumers prioritizing value and convenience – and restaurants across segments are looking for ways to meet these changing needs. This white paper dives into the data to explore the trends impacting quick-service restaurants (QSR), full-service restaurants (FSR), and fast-casual dining venues – and strategies all three categories are using to stay ahead of the pack.
Overall, the dining sector has performed well in 2024, but a closer look at specific segments within the industry shows that fast-casual restaurants are outperforming both QSR and FSR chains.
Between January and August 2024, visits to fast-casual establishments were up 3.3% YoY, while QSR visits grew by just 0.7%, and FSR visits fell by 0.3% YoY. As eating out becomes more expensive, consumers are gravitating toward dining options that offer better perceived value without compromising on quality. Fast-casual chains, which balance affordability with higher-quality ingredients and experiences, have increasingly become the go-to choice for value-conscious diners.
Fast-casual restaurants also tend to attract a higher-income demographic. Between January and August 2024, fast-casual restaurants drew visitors from Census Block Groups (CBGs) with a weighted median household income of $78.2K – higher than the nationwide median of $76.1K. (The CBGs feeding visits to these restaurants, weighted to reflect the share of visits from each CBG, are collectively referred to as their captured market).
Perhaps unsurprisingly, quick-service restaurants drew visitors from much less affluent areas. But interestingly, despite their pricier offerings, full-service restaurants also drew visitors from CBGs with a median HHI below the nationwide baseline. While fast-casual restaurants likely attract office-goers and other routine diners that can afford to eat out on a more regular basis, FSR chains may serve as special occasion destinations for those with more moderate means.
Though QSR, FSR, and fast-casual spots all seek to provide strong value propositions, dining chains across segments have been forced to raise prices over the past year to offset rising food and labor costs. This next section takes a look at several chains that have succeeded in raising prices without sacrificing visit growth – to explore some of the strategies that have enabled them to thrive.
The fast-casual restaurant space attracts diners that are on the wealthier side – but some establishments cater to even higher earners. One chain of note is NYC-based burger chain Shake Shack, which features a captured market median HHI of $94.3K. In comparison, the typical fast-casual diner comes from areas with a median HHI of $78.2K.
Shake Shack emphasizes high-quality ingredients and prices its offerings accordingly. The chain, which has been expanding its footprint, strategically places its locations in affluent, upscale, and high-traffic neighborhoods – driving foot traffic that consistently surpasses other fast-casual chains. And this elevated foot traffic has continued to impress, even as Shake Shack has raised its prices by 2.5% over the past year.
Steakhouse chain Texas Roadhouse has enjoyed a positive few years, weathering the pandemic with aplomb before moving into an expansion phase. And this year, the chain ranked in the top five for service, food quality, and overall experience by the 2024 Datassential Top 500 Restaurant Chain.
Like Shake Shack, Texas Roadhouse has raised its prices over the past year – three times – while maintaining impressive visit metrics. Between January and August 2024, foot traffic to the steakhouse grew by 9.7% YoY, outpacing visits to the overall FSR segment by wide margins.
This foot traffic growth is fueled not only by expansion but also by the chain's ability to draw traffic during quieter dayparts like weekday afternoons, while at the same time capitalizing on high-traffic times like weekends. Some 27.7% of weekday visits to Texas Roadhouse take place between 3:00 PM and 6:00 PM – compared to just 18.9% for the broader FSR segment – thanks to the chain’s happy hour offerings early dining specials. And 43.3% of visits to the popular steakhouse take place on Saturdays and Sundays, when many diners are increasingly choosing to splurge on restaurant meals, compared to 38.4% for the wider category.
Though rising costs have been on everybody’s minds, summer 2024 may be best remembered as the summer of value – with many quick-service restaurants seeking to counter higher prices by embracing Limited-Time Offers (LTOs). These LTOs offered diners the opportunity to save at the register and get more bang for their buck – while boosting visits at QSR chains across the country.
Limited time offers such as discounted meals and combo offers can encourage frequent visits, and Hardee’s $5.99 "Original Bag" combo, launched in August 2024, did just that. The combo allowed diners to mix and match popular items like the Double Cheeseburger and Hand-Breaded Chicken Tender Wraps, offering both variety and affordability. And visits to the chain during the month of August 2024 were 4.9% higher than Hardee’s year-to-date (YTD) monthly visit average.
August’s LTO also drove up Hardee’s already-impressive loyalty rates. Between May and July 2024, 40.1% to 43.4% of visits came from customers who visited Hardee’s at least three times during the month, likely encouraged by Hardee’s top-ranking loyalty program. But in August, Hardee’s share of loyal visits jumped to 51.5%, highlighting just how receptive many diners are to eating out – as long as they feel they are getting their money’s worth.
McDonald’s launched its own limited-time offer in late June 2024, aimed at providing value to budget-conscious consumers. And the LTO – McDonald’s foray into this summer’s QSR value wars – was such a resounding success that the fast-food leader decided to extend the deal into December.
McDonald’s LTO drove foot traffic to restaurants nationwide. But a closer look at the chain’s regional captured markets shows that the offer resonated particularly well with “Young Urban Singles” – a segment group defined by Spatial.ai's PersonaLive dataset as young singles beginning their careers in trade jobs. McDonald's locations in states where the captured market shares of this demographic surpassed statewide averages by wider margins saw bigger visit boosts in July 2024 – and the correlation was a strong one.
For example, the share of “Young Urban Singles” in McDonald’s Massachusetts captured market was 56.0% higher than the Massachusetts statewide baseline – and the chain saw a 10.6% visit boost in July 2024, compared to the chain's statewide H1 2024 monthly average. But in Florida, where McDonald’s captured markets were over-indexed for “Young Urban Singles” by just 13% compared to the statewide average, foot traffic jumped in July 2024 by a relatively modest 7.3%.
These young, price-conscious consumers, who are receptive to spending their discretionary income on dining out, are not the sole driver of McDonald’s LTO foot traffic success. Still, the promotion’s outsize performance in areas where McDonald’s attracts higher-than-average shares of Young Urban Singles shows that the offering was well-tailored to meet the particular needs and preferences of this key demographic.
While QSR, fast-casual, and FSR chains have largely boosted foot traffic through deals and specials, reputation is another powerful way to attract diners. Restaurants that earn a coveted Michelin Star often see a surge in visits, as was the case for Causa – a Peruvian dining destination in Washington, D.C. The restaurant received its first Michelin Star in November 2023, a major milestone for Chef Carlos Delgado.
The Michelin Star elevated the restaurant's profile, drawing in affluent diners who prioritize exclusivity and are less sensitive to price increases. Since the award, Causa saw its share of the "Power Elite" segment group in its captured market increase from 24.7% to 26.6%. Diners were also more willing to travel for the opportunity to partake in the Causa experience: In the six months following the award, some 40.3% of visitors to the restaurant came from more than ten miles away, compared to just 30.3% in the six months prior.
These data points highlight the power of a Michelin Star to increase a restaurant’s draw and attract more affluent audiences – allowing it to raise prices without losing its core clientele. Wealthier diners often seek unique culinary experiences, where price is less of a concern, making these establishments more resilient to inflation than more venues that serve more price-sensitive customers.
Dining preferences continue to evolve as restaurants adapt to a rapidly changing culinary landscape. From the rise in fast-casual dining to the benefits of limited-time offers, the analyzed restaurant categories are determining how to best reach their target audiences. By staying up-to-date with what people are eating, these restaurant categories can hope to continue bringing customers through the door.
The COVID-19 pandemic – and the subsequent shift to remote work – has fundamentally redefined where and how people live and work, creating new opportunities for smaller cities to thrive.
But where are relocators going in 2024 – and what are they looking for? This post dives into the data for several CBSAs with populations ranging from 500K to 2.5 million that have seen positive net domestic migration over the past several years – where population inflow outpaces outflow. Who is moving to these hubs, and what is drawing them?
The past few years have seen a shift in where people are moving. While major metropolitan areas like New York still attract newcomers, smaller cities, which offer a balance of affordability, livability, and career opportunities, are becoming attractive alternatives for those looking to relocate.
Between July 2020 and July 2024, for example, the Austin-Round Rock-Georgetown, TX CBSA, saw net domestic migration of 3.6% – not surprising, given the city of Austin’s ranking among U.S. News and World Report’s top places to live in 2024-5. Raleigh-Cary, NC, which also made the list, experienced net population inflow of 2.6%. And other metro areas, including Fayetteville-Springdale-Rogers, AR (3.3%), Des Moines-West Des Moines, IA (1.4%), Oklahoma City, OK (1.1%), and Madison, WI (0.6%) have seen more domestic relocators moving in than out over the past four years.
All of these CBSAs have also continued to see positive net migration over the past 12 months – highlighting their continued appeal into 2024.
What is driving domestic migration to these hubs? While these metropolitan areas span various regions of the country, they share a common characteristic: They all attract residents coming, on average, from CBSAs with younger and less affluent populations.
Between July 2020 and July 2024, for example, relocators to high-income Raleigh, NC – where the median household income (HHI) stands at $84K – tended to hail from CBSAs with a significantly lower weighted median HHI ($66.9K). Similarly, those moving to Austin, TX – where the median HHI is $85.4K – tended to come from regions with a median HHI of $69.9K. This pattern suggests that these cities offer newcomers an aspirational leap in both career and financial prospects.
Moreover, most of these CBSAs are drawing residents with a younger weighted median age than that of their existing residents, reinforcing their appeal as destinations for those still establishing and growing their careers. Des Moines and Oklahoma City, in particular, saw the largest gaps between the median age of newcomers and that of the existing population.
Career opportunities and affordable housing are major drivers of migration, and data from Niche’s Neighborhood Grades suggests that these CBSAs attract newcomers due to their strong performance in both areas. All of the analyzed CBSAs had better "Jobs" and "Housing" grades compared to the regions from which people migrated. For example, Austin, Texas received the highest "Jobs" rating with an A-, while most new arrivals came from areas where the "Jobs" grade was a B.
While the other analyzed CBSAs showed smaller improvements in job ratings, the combination of improvements in both “Jobs” and “Housing” make them appealing destinations for those seeking better economic opportunities and affordability.
Young professionals may be more open than ever to living in smaller metro areas, offering opportunities for cities like Austin and Raleigh to thrive. And the demographic analysis of newcomers to these CBSAs underscores their appeal to individuals seeking job opportunities and upward mobility.
Will these CBSAs continue to attract newcomers and cement their status as vibrant, opportunity-rich hubs for young professionals? And how will this new mix of population impact these growing markets?
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