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Last week, Chipotle’s Q1 2024 update featured a number of positives, including visitation trends that outperformed the broader restaurant category and strong contribution from new store openings. More than 5% of the company’s 7% comparable sales growth during the quarter was driven by transaction growth, and year-over-year visitation trends have accelerated thus far in April. (Recall that our year-over-year visitation data includes contribution from stores opened during the past year as well as improvements in visits per location).
Impressively, there were multiple sources driving Chipotle’s transaction growth during the quarter. The company’s strong track record for menu innovation under CEO Brian Niccol continued during the most recent quarter, with the company spotlighting Barbacoa and the return of Chicken Al Pastor as a limited time offer. Management will continue to explore new menu additions, and is currently developing a new product pipeline for the next 18-24 months.
While menu innovation is important, it’s clear that throughput (the amount of customers that can be served with Chipotle’s assembly line process) is becoming a major factor in visitation traffic outperformance. We believe this has been driven by lower employee turnover rates—the company noted that it is experiencing the lowest turnover rates since Niccol joined the company in March 2018. According to management, throughput reached the highest levels in four years because of more consistent staffing, which aligns with our visit per location data for the past five years (below).
Chipotle noted that its throughput improved by nearly 2 entrees in its peak 15 minutes compared to last year with each month showing an acceleration. According to the company, “the restaurants run more smoothly as our teams are properly trained and deployed, which allows them to keep up with demand without stress. This leads to more stability and therefore more experienced teams that execute better every day, and this can be seen in our latest turnover data which is at historically low levels.” Our data also shows that visitation trends are improving during its peak hours, but that its peak hours are also changing. Historically, the hours between 12:00 PM-2:00 PM have represented Chipotle’s most frequently visited hours, but post-pandemic, we’ve seen visits shift to the 6:00 PM-8:00 PM timeframe (below). Return-to-office trends partly explain these trends, as do Chipotle’s push into smaller, more suburban/rural markets.
When we look at visit per location trends by hour, we see that most of the improvement during the Q1 2024 compared to Q1 2023 took place during the later afternoon and evening dayparts.
Looking ahead, Chipotle sees an opportunity to improve peak hour throughput, including adjusting the cadence of digital orders to better balance the deployment of labor (thus eliminating the need to pull a crew member from the front makeline to help the digital makeline during peak periods). The company also plans to bring back a coaching tool for its associates that it had in place prior to the pandemic. With more and more retailers embracing generative AI to help educate and train their employees-–a trend we heard consistently at this week’s Analytics Unite conference–we would expect Chipotle to also adopt generative AI with its updated coaching tool, potentially unlocking greater throughput improvements in the process.
The widespread adoption of hybrid work continues to be one of the most significant paradigm shifts since the COVID pandemic. As employees visit offices less frequently, or not at all, corporate users are opting for less but better space which is driving office vacancy rates to record highs.
But even as utilization for many office buildings remains below capacity, some buildings are clearly prospering. So what sets these thriving properties apart from the pack? We looked at outperforming office buildings in four major metro areas – New York, Chicago, San Francisco, and Dallas – to find out.
The post-pandemic office recovery has been uneven across the country. As of February 2024, a significantly larger share of workers in the New York-Newark-Jersey City and Dallas-Fort Worth CBSAs were back in the office, while office visits in the Chicago-Naperville-Elgin and San Francisco-Oakland-Berkeley CBSAs remained subdued.
But throughout the country, the reality is much more nuanced as some office buildings struggle to maintain occupancy,others are thriving. We identified four office buildings in four major metropolitan areas where the recovery in utilization was significantly stronger than the respective metro:
What sets these buildings apart from the pack?
One factor that isn’t driving the office recovery at these high-occupancy office buildings is different weekly visitation patterns.
Location intelligence for offices nationwide indicates that hybrid workers appear to prefer coming to the office mid-week: The bulk of weekly visits occur on Tuesdays, Wednesdays, and Thursdays, with fewer visits taking place on Monday and even less visits on Fridays. And this was also the weekly visitation pattern in the four CBSAs analyzed as well as in the high-occupancy office buildings. In fact, the outperforming office buildings had even more of their visits concentrated mid-week compared to the visit patterns in the wider CBSA.
It seems, then, that the higher visits to these outperforming offices is not due to more employees coming in on typical WFH days. Instead, more workers are likely coming in mid-week to make up for the lull on Mondays and Fridays.
So who are these visitors? And could they hold the key to these buildings' strong recovery numbers?
Focusing on the period between March 2023 and February 2024 reveals that in all the labor catchment areas of the analyzed Office Indexes, the share of one-person households was larger than the nationwide share of 27.5%. And during the same period, the share of one-person households in the catchment areas of the high-performing office buildings was even greater – almost 50% of households in the captured market of 2010 Flora St. in Dallas consisted of one-person households.
On the other hand, families with children were underrepresented in the catchment areas of the office indexes relative to the nationwide average of 27.1% – and the share of households with children was even lower in the catchment areas of the high-occupancy office buildings.
This indicates that those with young children at home were generally less likely to go into the office – and so the office buildings seeing the strongest post-COVID recovery are those that serve a large contingent of single employees. On the flip side, there is often a motivation for young singles to visit the office more frequently, whether driven by the desire for training and mentorship or the prospect of meeting a significant other in or around the workplace.
Much has been written on the challenging impact that return-to-office mandates can have on working parents – and especially on working mothers – so it may not come as a surprise that employees from family households are underrepresented in office buildings in 2024.
But the fact that one-person households are even more prevalent in the labor markets of the overperforming buildings (as compared to the wider CBSA Office Index) indicates that businesses and office assets can thrive even without wooing working parents back to the office.
So who are these singles driving the return to the office? Some of this segment may be made up of Gen-Zers seeking the networking and mentorship opportunities provided by an in-person office setting. But it’s not just younger workers leading the return to the office – the data indicates that executives and managers also make up an outsized portion of the outperforming buildings’ catchment areas. In all four CBSAs analyzed, the catchment area of the high-occupancy building included a significantly larger share of people in a managerial or executive role compared to the average catchment area composition of the wider CBSA Office Index.
Many of these executives are likely choosing – rather than being forced – to work on-site. Some might be looking to encourage their staff to return to the office by leading by example, while many are likely leveraging their space to host clients, driving foot traffic to these locations higher. But whatever factors are driving the trend – it appears that office buildings looking to bounce back in the new normal need to make sure they are drawing back the managerial ranks.
Analyzing the popular industries and occupations in the catchment areas of the office buildings and industries also reveals that the overperforming buildings serve a much higher share of employees working in finance, insurance, and real estate. A larger share of the catchment area population of the high-occupancy office complexes also works in professional services – including high-tech jobs – compared to the office index in the wider CBSA.
Many financial institutions and tech companies have asked employees to return to the office at least three days a week, which could explain why these industries are overrepresented in the catchment area of the high-occupancy buildings. This data may indicate, then, that while some of the foot traffic is coming from executives choosing to return to their pre-COVID work habits, the return-to-office mandates – whether full or part-time – are likely also helping these buildings stay ahead of the curve.
Although the proliferation of office vacancies across the country can make it seem like the return to office battle has already been lost, several buildings are bucking the trend. Location intelligence indicates that a combination of partial return-to-office mandates along with a larger-than-usual share of visitors from executives and non-parental households is helping these office complexes thrive.
Sweetgreen and First Watch both went public in 2021 and have since steadily increased in popularity – and in store count. So with 2024 well underway, we checked in with the two brands to see how they fared in Q1 and to explore some of the factors underlying their success.
Despite the dining challenges of much of 2023 and early 2024, sweetgreen posted impressive visits between April 2023 and March 2024, with the chain’s YoY traffic increases ranging from 21.4% to 51.6%.
The remarkable visit surge was partially driven by the sweetgreen’s significant expansion, which could explain the slight dips in average visits per location for much of 2023 while consumers around sweetgreen’s newer restaurantes familiarized themselves with the brand’s offerings. But since December 2023, YoY visits per location have been positive – with the exception of a weather-induced slump in January – indicating that the chain’s newer venues have established themselves within their community.
This narrowing of the gap between visits and visits per location may also signal the success of sweetgreen’s strategic shift towards prioritizing "quality over quantity” – slowing down expansion and investing in an enhanced customer experience.
As a salad and grain-bowl chain, sweetgreen holds special appeal for wellness-focused younger consumers, including singles and members of the coveted Gen Z demographic. But as the chain has expanded, it has also succeeded in reaching new audiences.
Sweetgreen has been explicit about its goal of reaching Gen Z consumers. And analyzing the demographic makeup of the chain’s captured market reveals that sweetgreen’s trade area includes a relatively large share of one-person households (that tend to be on the younger side) But analyzing shifts in the chain’s captured market composition over the past five years also reveals that the share of one-person households has been decreasing – while remaining above the nationwide average of 28.0% – and the share of households with children has increased. So even as sweetgreen continues serving its core consumers, the chain’s expansion has also allowed sweetgreen to reach new audiences.
First Watch is also in expansion mode, and with plans to open some 50 more restaurants this year the chain shows no signs of slowing down. And, like sweetgreen, First Watch’s expansion has driven significant growth to the chain’s overall visits – and the chain’s average visits per location numbers are up as well, indicating that the new venues are finding a receptive audience.
By staying nimble on its feet and continually changing up its menu offerings, First Watch has succeeded in differentiating itself from other breakfast chain giants – and appears poised to enjoy continued success throughout the year.
First Watch’s expansion has also helped the company reach new types of diners even as the chain continues catering to its core audience. The share of the Spatial.ai: PersonaLive’s “Upper Suburban Diverse Families” segment in First Watch’s captured market has held steady over the past five years, even as the share of the “Blue Collar Suburbs” and “Urban Low Income” segments increased. It seems, then, that First Watch has also succeeded in leveraging its store fleet expansion to reach new audience segments – without sacrificing its core patrons.
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Sweetgreen and First Watch’s expansions have helped the companies increase visits and reach new segments – without sacrificing their core audiences. What does the rest of 2024 have in store for the chains?
Visit our blog at placer.ai to find out.
Dining took a hit over the past few years, with major challenges from COVID to rising costs weighing on the category. And perhaps no food-away-from-home segment was more impacted than Full Service Restaurants (FSR) – which stagnated as consumers traded down and sought out more affordable ways to treat themselves.
But new years present new opportunities – and there are signs that sit-down restaurants may be springing back to life. So with 2024 underway, we dove into the data to explore the current state of FSR. Is cooling inflation prompting a rise in Full Service Restaurant activity? How did FSR leaders like Dine Brands (owner of casual dining favorites Applebee’s and IHOP), Bloomin’ Brands (owner of popular grill and steak chains like Outback Steakhouse and Carrabba’s Italian Grill along with high-end Fleming’s Prime Steakhouse & Wine Bar), and Texas Roadhouse fare in Q1?
With some 1500 locations nationwide, Applebee’s has long been a mainstay of the American casual dining scene. Like other FSR chains, Applebee’s experienced a setback during the pandemic and has since faced industry-wide headwinds. But even though the brand’s store fleet shrunk by around 30 stores last year, overall YoY visits to Applebee’s declined just slightly between October 2023 and February 2024 (January’s weather-driven slump aside). And in March, the chain saw a promising 3.8% YoY visit uptick.
Breakfast leader IHOP also experienced negative YoY visits in October and November 2023, but in December – when the pancake chain traditionally enjoys a major holiday boost – visits jumped 2.8% YoY. Like Applebee’s, IHOP felt the effects of January’s Arctic blast, but saw its visits recover quickly in February and March 2024.
Bloomin’ Brands’ leading casual dining chains Outback Steakhouse, Carrabba’s Italian Grill, and Bonefish Grill appear to be following largely similar trajectories.
Though the brands experienced YoY visit gaps through most of Q3 2023 – and were whalloped by January’s inclement weather – all three chains experienced YoY visit increases in March 2024. Given the fact that the restaurants’ store counts didn’t change significantly last year, this visit growth appears to portend good things for Bloomin’s fast casual portfolio in the year ahead.
But it is Bloomin’ Brands’ fine dining concept, Fleming’s Prime Steakhouse & Wine Bar, that really seems to be hitting it out of the park. While Fleming’s also saw visit gaps between October 2023 and January 2024, the chain experienced 9.6% and 7.5% visit growth, respectively, in February and March 2024 – closing out Q1 with a bang.
Fleming’s particularly robust recent performance may be due in part to its relatively affluent customer base. Nearly one-third of households in Fleming’s captured market have an annual income of $150K or more – compared to just 18.6% to 23.7% for Bloomin’s casual dining concepts. Though a night out at the fine-dining steakhouse can be expensive, Fleming’s well-heeled visitor base is better positioned to absorb price increases than other consumers.
Appealing to affluent consumers, however, isn’t the only way to go. Texas Roadhouse is firmly in the casual dining space and tends to cater to average-income diners. (In Q1 2024, just 15.2% of its captured market had a household income ≥$150K.) But the steakhouse’s strategy of satisfying steak lovers with high-quality, affordable offerings is working: Throughout Q1, Texas Roadhouse experienced strongly positive YoY visit growth. And while some of this growth is attributable to the brand’s increasing unit count, the average number of visits per location is generally keeping pace – showing that Texas Roadhouse’s expansion continues to meet strong demand.
Though more affordable Dining segments like QSR and Fast Casual began to spring back to life last year, FSR has yet to fully recover from the double whammy of COVID and inflation. But if March 2024’s promising numbers are any indication, the category may be in for a turnaround. How will FSR continue to perform as 2024 progresses?
Follow Placer.ai’s Dining deep dives to find out.
Restaurants continue to face headwinds, from still-high food-away-from-home prices to rising labor costs. But despite these challenges, there are promising signs that the industry may be in for an upturn. And increasingly, chains are leaning into breakfast and late night offerings to maximize revenue and foster customer loyalty.
So with Q1 2024 under our belts, we checked in with Wendy’s and Denny’s, two dining leaders with very different offerings in the breakfast space. How did they weather the first quarter of 2024 (pun intended)? And which dayparts experienced the biggest visit boosts in Q1?
After a tough Q4 2023 – and a January 2024 dragged down by cold and stormy weather – YoY visits to Wendy’s and Denny’s began to pick up in February and March 2024. And even accounting for January’s Arctic blast, Wendy’s and Denny’s came out ahead on a quarterly basis, with YoY visits up 0.7% and 1.0% respectively.
Wendy’s first launched its breakfast menu in March 2020, just before COVID sent the dining industry into a tailspin. But despite a rocky start, Wendy’s doubled down on the morning daypart, continually tweaking its breakfast offerings and investing ad dollars to boost breakfast sales.
Drilling down into hourly visit data shows that this strategy is paying off. Visits to Wendy’s during the morning daypart (between 6:00 AM and 11:00 AM) jumped 9.3% in Q1 2024 compared to Q1 2023. The chain’s nighttime daypart – which the burger giant began advertising in 2023 for the first time in four years – also saw a YoY boost. Meanwhile, Wendy’s traditional lunch and dinner time slots held steady, with just minor quarterly visit gaps, indicating that the chain’s overall YoY visit growth in Q1 was driven by its breakfast and nighttime push.
Denny’s has always been all about breakfast. And with some 75.0% of Denny’s locations open 24/7 (even on Christmas), hungry diners frequent the chain day and night to satisfy their cravings for hash browns, eggs, pancakes, and other breakfast favorites.
Unsurprisingly, the chain gets most of its visits in the morning and early afternoon. But in Q1 2024, it was the late night daypart that experienced the biggest YoY visit bump – perhaps driven in part by Denny’s push last year to increase the number of locations open in the wee hours.
But Denny’s busiest time slot, between 11:00 AM and 3:00 PM, also experienced a YoY visit increase – showing that even as the chain cements its role as a go-to nighttime destination, it continues to face healthy demand during more traditional dining dayparts.
Breakfast and late night dining offerings have emerged as important drivers of dining success. How will these dayparts continue to fare as the year wears on? And which other brands will make inroads into the breakfast and nighttime dining game?
Follow Placer.ai’s data-driven dining analyses to find out.
At a time when retail loyalty appears to be low, warehouse clubs remain the exception. Bulk is big business in the U.S. retail market, and clubs have found a way to deliver on a combination of value, convenience and experience, and sometimes $1.50 hot dogs. The allure of the warehouse club defies some current consumer logic; U.S. households are not growing according to the U.S. Census Bureau. But, clubs also represent much of what is good in retail today: a broad combination of goods and services, inherent value and high quality private labels.
These factors have aided warehouses in growing store traffic compared to their mass merchant counterparts, particularly in the first quarter of 2024. Clubs--including BJ’s Wholesale Club, Sam’s Club and Costco Wholesale--saw visits increase by almost 8% year-over-year, almost double the combined growth of Walmart and Target during the same period. Mass merchants have been squeezed by other value sectors, clubs have been able to hold their own and continue to provide “perceived” value to shoppers, contributing to their traffic volumes.
Beneath the umbrella of growth, each chain has some surprising competitive advantages, and it’s clear that each club serves a distinct purpose to its visitors. In reviewing daily visits, Sam’s Club owns Saturdays, with 22% of visits occurring that day (as shown below), the highest percentage of visits compared to its competition. In contrast, Costco sees a higher percentage of visits on weekdays, specifically Tuesday through Thursday, compared to the other chains.
While Sam’s Club and Costco stand out in terms of their daily visits, BJ’s excels in the time of day that it attracts higher levels of visitors to its locations. BJ’s draws 7% of visits between 8:00-10:00 AM (show below), which is two points higher than Sam’s Club and more than double Costco’s percentage of visits. Not only does BJ’s attract the morning shopper, but also the afterhours customer. BJ’s over indexes in the percentage of visits between 7:00-10:00 PM, with almost 11% of visits occurring during those later hours. BJ’s locations tend to open earlier and stay open later than their Sam’s Club and Costco counterparts, which vary in operational hours for the clubs themselves outside of gas stations. This creates a distinct advantage for BJ’s, especially in areas of direct competition, as visitors looking to shop at off-hours are likely to visit BJ’s.
It’s clear that each club chain has its key day and time to attract visitors that doesn’t overlap too much with its competitors. Warehouse clubs are doing a fantastic job at meeting their consumers where they are and when they prefer to shop. Clubs benefit from increased loyalty due to membership, but it appears that visitors flock to these clubs no matter the day or time. Maybe it’s time to bring breakfast to the Costco & Sam’s Club food courts?
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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Convenience stores, or c-stores, have been one of the more exciting retail categories to watch over the past few years. The segment has undergone significant shifts, embracing more diverse offerings like fresh food and expanded dining options, while also exploring new markets and adapting to changing consumer needs. We looked at the recent foot traffic data to see what this category's successes reveal about the current state of brick-and-mortar retail.
Convenience stores are increasingly viewed not only as places to fuel up, but as affordable destinations for quick meals, snacks, and other necessities. And analyzing monthly visits to the category shows that it is continuing to benefit from its positioning as a stop for food, fuel, and in some cases, tourism.
Despite lapping a strong H1 2023, visits to the category either exceeded last year’s levels or held steady during all but one of the first eight months of 2024 – highlighting the segment’s ongoing strength. Only in January 2024 did C-stores see a slight YoY dip, likely reflecting a weather-induced exaggeration of the segment’s normal seasonality.
Indeed, examining monthly fluctuations in visits to c-stores (compared to a January 2021 baseline) shows that foot traffic to the category tends to peak in summer months – perhaps driven by summer road trips and vacations – and slow down significantly in winter. Given summer’s importance for convenience stores, the category’s August YoY visit bump is a particularly promising indication of c-stores’ robust positioning this year.
While some C-store chains, like 7-Eleven, have a nationwide presence, others are concentrated in specific areas of the country. But as the popularity of C-stores continues to grow, regional chains like Wawa, Buc-ee’s, and Sheetz are expanding into new territories, broadening their reach.
Wawa, a beloved brand with roots in Pennsylvania, has become synonymous with its fresh sandwiches, coffee, and a highly loyal customer base. Wawa has been a major player in the c-store space in recent years, with a revamped menu driving ever-stronger foot traffic to its Mid-Atlantic region stores. Between January and August 2024, YoY visits to the chain were mostly elevated. And the chain is now venturing into states like Florida – where its store count has grown significantly over the past few years – as well as Georgia and Alabama.
Meanwhile, Texas favorite Buc-ee’s, though known for its enormous stores and mind boggling array of dining options, has a relatively small footprint – but that might be changing. The chain, which also outpaced its already-strong 2023 performance this year, is opening locations in Arkansas and North Carolina, further building on its reputation as a destination for travelers. And Sheetz, another regional chain with a strong presence in Pennsylvania, is also expanding, with plans to open locations in Southern states like North Carolina and Tennessee.
This trend toward regional expansion offers significant opportunities for growth, not only by increasing store count, but also by reaching new consumer bases and target audiences. Customer behavior differs between markets – and by expanding into new areas, c-stores can tap into unique local visitation patterns.
One metric that highlights local differences in consumer behavior is dwell time, or the amount of time a customer spends inside a convenience store per visit. In some regions, visitors tend to move in and out quickly, while in others, customers linger for longer periods of time.
Analyzing convenience store dwell times by state highlights substantial differences in visitor behavior. During the first eight months of 2024, coastal states (with the exception of Oregon) tended to see shorter average dwell times (between 7.5 and 11.8 minutes). On the other hand, in states like Wyoming, Montana, and North Dakota, average dwell times ranged between 21.2 and 28.2 minutes.
Interestingly, the states with the longest dwell times also have some of the highest percentages of truck traffic on interstate highways – suggesting that these longer stops are perhaps made by long-haul truckers looking for a place to shower, relax, and grab a bite to eat.
Even as regional favorites expand their reach, nationwide classic 7-Eleven is taking steps to further cement its growing role as a prime grab-and-go food and beverage destination. And like other dining destinations, the chain relies on limited-time offers (LTOs) to fuel excitement – and visits.
One of the most iconic, and beloved c-store LTOs is 7-Eleven’s Slurpee Day, which falls each year on July 11th. The event, during which all 7-Eleven locations hand out free slurpees, tends to drive significant upticks in foot traffic – and this year was no exception. Visits to the convenience store jumped by a whopping 127.3% on July 11th, 2024 relative to the YTD daily visit average – proving that good deals will bring customers in the door.
The convenience store sector continues building on the impressive growth seen in 2023. As many chains double down on expanding both their regional presence and their offerings, will they continue to drive growth in the coming years?
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