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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.
How did the Placer 100 Index for Retail & Dining fare in June 2024? We dove into the data to find out.
As the first half of the year comes to a close, retail and dining visits continue to demonstrate resilience. Analyzing the YoY foot traffic performance of the Placer 100 Index for Retail and Dining highlights this positive trend, with June visits increasing 6.8% relative to June 2023. This growth follows May 2024's YoY visit growth of 5.3%.
This upward visitation pattern shows that despite continued concerns, consumers are feeling cautiously optimistic about the current economic climate. With back-to-school shopping set to ramp up over the next two months, retail visits may well continue on their upward trajectory.
Drilling down deeper into the data highlights the priority shoppers continue to place on value – with bargain retailers claiming many of the top spots for YoY visit growth. Grocery stores were also major winners in June 2024, likely buoyed by consumers seeking to cut costs by making more of their food at home.
Three grocery chains ranked among June 2024’s top YoY visit performers: Aldi (28.4%), Trader Joe’s (17.4%) and H-E-B (13.3%). These chains, as well as three others – Food Lion Grocery Store, ShopRite, and Walmart Neighborhood Market – were also among the top performing chains for YoY visits per location.
Within the already-strong grocery segment, one chain – H-E-B – continues to prove its staying power. Despite being concentrated in Texas, the chain consistently ranks as one of the most popular grocery chains in the country, as evidenced by its consistently elevated foot traffic.
Since January 2024, YoY visits to H-E-B have increased substantially – outperforming the wider traditional grocery sector. Though very much a full-service supermarket, H-E-B’s foot traffic growth has been more akin to that seen by budget-oriented, limited assortment chains like Aldi and Trader Joe's.
One factor that may be contributing to H-E-B’s ongoing success is its growing role as a purveyor of takeout and inexpensive prepared food options. Many of H-E-B’s grocery stores have in-store restaurants – and the chain also offers a variety of other ready meals and snacks.
The focus on takeout and convenience food seems to be a solid move for H-E-B, as evidenced by the chain’s YoY increase in short visits – i.e., those lasting under ten minutes. In Q2 2024, short visits to H-E-B increased by 14.3% compared to Q2 2023, while over the same period, longer visits increased by a more modest 10.7%. Some of these quick-stop visitors may be dropping by to grab a snack or to-go meal.
In recognition of the growing demand for quick-stop grocery and prepared food options, H-E-B has also been making inroads into the c-store space, with a chain of twelve convenience stores recently rebranded as H-E-B Fresh Bites. And as a grocer with its finger on the pulse of what shoppers want, H-E-B appears poised for further success.
As the summer gets underway, retail and dining visitation patterns remain strong – with value chains and grocery retailers leading the way. How will these trends continue to play out throughout the summer?
Visit Placer.ai to find out.
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?
Visit Placer.ai to keep up with the latest data-driven convenience store updates.
Grocery chains in the United States are increasingly investing in on-site healthcare clinics, transforming their stores into hubs for both food and wellness. While grocery stores have long featured pharmacies and some basic healthcare services like vaccinations, recent years have seen a shift towards more extensive healthcare offerings.
Today, many grocery stores offer a range of services – from primary and urgent care to dental and mental health care. In addition to providing an important community service, grocery-anchored healthcare clinics can boost foot traffic at chains, help health providers reach more patients, and allow shoppers to manage their health and home needs in one convenient trip.
This white paper examines the impact these in-store clinics have on grocery chain visitation patterns and trade area characteristics. Are shoppers more or less likely to make repeat visits to grocery stores with healthcare services? And how does the addition of a clinic affect the demographic profile of a grocery store’s captured market? The report examines these questions and more, offering insights for stakeholders across the grocery and healthcare industries.
Analyzing foot traffic to grocery stores with and without in-store clinics shows the positive impact of these services: Across chains, locations with on-site healthcare offerings drew more visits in H1 2024 than their chain-wide averages.
The Kroger Co., which operates numerous regional banners as well as its own eponymous chain, has been a leader in in-store healthcare services since the early aughts. The company introduced its in-store medical center, The Little Clinic in 2003 – and today operates over 225 Little Clinic locations across its Kroger banner, as well as regional chains Dillons, Jay C Food Stores, Fry’s, and King Soopers.
And in H1 2024, the eight Dillons locations with clinics saw, on average, 93.0% more visits per location than the chain’s banner-wide average. Jay C, which offers two in-store clinics, also saw visits to these venues outpace the H1 2024 banner-wide average by 92.9%. For both chains, relatively small overall footprints may contribute to their outsize visit differences: Indiana-focused Jay C operates just 22 locations, all in the Hoosier State, while Kansas-based Dillons has some 64 locations.
But similar patterns, if somewhat less pronounced, could be observed at Kroger (43.0%), Fry’s (19.2%), and King Soopers (16.5%) – as well as at H-E-B (14.5%), which boasts its own expanding network of in-store clinics.
Analyzing the trade areas of grocery stores with healthcare clinics shows that these services tend to draw more affluent visitors from within the stores’ trade areas.
For some chains, including King Soopers, H-E-B, and Jay C, the clinics are positioned to begin with in areas serving higher-income communities. The median household income (HHI) of King Soopers’ in-store clinic’s potential markets, for example, came in at $92.3K in H1 2024 – significantly above the chain’s overall potential market median HHI of $88.1K. Similarly, the potential markets of H-E-B and Jay C Food Stores with clinics had higher median HHIs than the chains’ overall averages.
And for all three chains, stores with clinics tended to attract visitors from captured markets with even higher median HHIs – showing that within these affluent communities, it is the more well-to-do customers that tend to frequent these venues. (A chain or store’s potential market is obtained by weighting each CBG in its trade area according to the size of the population – thus reflecting the general composition of the community it serves. A chain or store’s captured market, on the other hand, is obtained by weighting each CBG according to its share of visits to the business in question – and thus represents the population that actually visits it in practice.)
Other brands, including Fry’s, Kroger, and Dillons, have positioned clinics in stores with potential market median HHIs slightly below chain-wide averages. But within these markets, too, it is the more affluent consumers that are visiting these stores, pushing up the median HHI of their captured markets.
These patterns highlight that, for now, grocery store clinics tend to attract consumers on the upper ends of local income spectrums. This information can be utilized by healthcare professionals and grocery store owners to pinpoint neighborhoods that may be open to grocery-anchored clinics, or to take steps to increase penetration in other areas.
Supermarket giant Kroger is a major player in the world of grocery-anchored healthcare, offering visitors access to pharmacies, clinics, and telehealth options via its grocery stores. What impact has the company’s embrace of healthcare had on visits and loyalty?
An analysis of household compositions across the potential and captured markets of Kroger-owned stores with and without Little Clinic offerings suggests that families with children are extremely receptive to these services.
In H1 2024, Kroger, King Soopers, Fry’s, Jay C, and Dillons all featured captured markets with higher shares of STI: PopStats’ “Households With Children” segment than their potential ones – highlighting the chains’ appeal for families. But the share of parental households in those stores with Little Clinics jumped significantly higher for all five banners.
The share of families with children in King Soopers’ overall captured market stood at 28.3% in H1 2024, higher than the 27.2% in its potential one. But the households with children in the captured markets of King Soopers locations with Little Clinics was significantly higher – 30.6% – and similar patterns emerged at Jay C, Dillons, Kroger, and Fry’s.
This special draw is likely linked to the clinics' focus on family health services like physicals, nutrition plans, and vaccines. The convenience of being able to take care of healthcare, grocery shopping, and pharmacy needs all in one go makes these stores particularly attractive to parents. And this jump in foot traffic shows the strategic advantage of incorporating healthcare services into the retail environment.
Providing essential healthcare services at the supermarket can establish a grocery chain as a crucial part of a shopper's daily life, enhancing visitor loyalty, and helping nurture long-term customer relationships. Indeed, in-store clinics offer a unique opportunity for grocery providers to connect with customers on a level that extends beyond the transactional.
An analysis of several Kroger-branded locations in the Cincinnati metro area showcases the profound impact in-store clinics can have on customer loyalty. In H1 2024, stores with Little Clinics had significantly higher shares of repeat visitors – defined as those making six or more stops at the store during the analyzed period – than those without.
For instance, 36.4% of visitors to a Kroger Marketplace store with an in-store clinic in Harrison, Ohio, frequented the location at least six times during the first half of 2024. But over the same period, only 29.0% of visitors stopped by at least six times to a nearby Kroger location in Cleves, Ohio – just ten miles away. Similarly, 30.7% of visitors to the Beechmont Ave. Kroger Food & Drug location with a clinic visited at least six times in H1 2024, compared to 23.0% for the nearby Ohio Pike Kroger store.
This trend was consistent across the analyzed locations, with those offering in-store clinics attracting significantly higher shares of loyal visitors. These metrics support the value of offering additional services as a draw for frequent visitors, while also providing the clinics themselves with the visitor volume needed to operate profitably.
Texan grocery chain H-E-B is beloved across the state – and though the chain isn’t new to the healthcare scene, it has been doubling down on wellness. In 2022, H-E-B launched H-E-B Wellness, a healthcare platform that offers patrons a variety of medical services, including – as of today – some 12 primary care clinics, many of them inside stores.
H-E-B stores with primary care clinics are helping to cement the grocer’s role as a convenient one-stop for local residents – allowing them to drop in to a nearby location for both daily grocery needs and wellness care.
H-E-B has always placed a premium on community, stepping up to help local residents in times of need. And though the chain as a whole draws an overwhelming majority of its visitors from nearby areas, those with clinics do so even more effectively. In H1 2024, some 83.6% of visitors to H-E-B came from less than 10 miles away. But for locations with primary care clinics, this share increased to 88.0%.
This suggests that wellness services are particularly appealing to nearby residents, strengthening H-E-B’s connection with local consumers even further. And for a grocery store centered on community engagement, the integration of health services into its offerings is proving to be a winning strategy.
H-E-B has been steadily expanding its primary care offerings since it launched the Wellness concept, adding two primary clinics at locations in Cypress, TX and Katy, TX in June 2023. Following the opening of these clinics – which operate Mondays through Fridays – both locations saw marked increases in the share of “Urban Cliff Dwellers” in their weekday captured markets. This STI: Landscape segment group encompasses families both with and without children, earning modest incomes and enjoying middle-class pleasantries.
Between June 2022 - May 2023, the share of “Urban Cliff Dwellers” in the weekday captured markets of the Cypress and Katy locations stood at 9.5% and 7.2%, respectively. But once the stores had clinics in place, those numbers jumped to 12.4% and 11.0%, respectively.
This increase in the stores’ reach among “Urban Cliff Dwellers” immediately following the clinics’ openings suggests that in addition to more affluent consumers, middle-class families also harbor considerable interest in these services. As more retailers continue making inroads into the healthcare sector, they may find similar success in attracting diverse groups of convenience-seeking shoppers.
As grocery stores lean into healthcare, they are transforming into multifaceted hubs that offer both essential health services and everyday shopping needs. Retailers like Kroger and H-E-B are reaping the benefits of boosted foot traffic, higher-income visitors, and strengthened community ties – while offering their shoppers convenience that helps streamline their daily routines.
Walmart, Target, and Costco are three of the most popular retailers in the country, drawing millions of shoppers through their doors each day. Each of these retail giants boasts distinct strengths and strategies that cater to their unique customer bases, allowing them to thrive in a highly competitive market.
This white paper takes a closer look at some of the factors that are helping the three chains flourish. How does Walmart’s positioning as a family-friendly retailer help it drive visits in its more competitive markets? How can Target leverage its reach to drive more loyal visits? And what does the increase in young shoppers frequenting membership warehouse clubs mean for Costco?
We dove into the location analytics to explore these questions further.
Examining monthly visitation patterns for the three retail giants shows Costco’s wholesale club model leading the way with consistent year-over-year (YoY) visit growth – ranging from 6.1% in stormy January 2024 to 13.3% in June. Family favorite Walmart followed closely behind, seeing YoY foot traffic growth during all but two months, when visits briefly trailed slightly behind 2023 levels before rebounding.
Target, meanwhile, had a slower start to the year, with visits trending below 2023 levels for most of January to April. Over this same period (the three months ending May 2024), Target reported a 3.7% decline in YoY comparable sales. But since then, things have begun to turn around for the chain, with YoY visits rising in May (2.5%), June (8.9%), and July (4.7%). This renewed visit growth into the second half of the year bodes well for the superstore – and the ongoing back-to-school season may well push visits up further as the summer winds down.
For all three chains, Q2 2024’s visit success has likely been bolstered in part by summer deals and intensifying price wars – as the retailers slash prices to woo inflation-weary consumers back to the store.
Over the past few years, consumer behaviors have been changing rapidly in response to shifting economic conditions. This next section explores some of these changes at Walmart, Target, and Costco, to better understand what may be driving these shifts.
One way that consumers have traditionally responded to inflation and other headwinds has been through the adoption of mission-driven shopping – making fewer, but longer, trips to retailers, so that every visit counts. Superstores and wholesale clubs, which offer one-stop shopping experiences, have long been prime destinations for these extended shopping trips. And even during periods when visits have lagged, these retailers have often benefited from extended dwell times – leading to bigger basket sizes.
A look at changes in average dwell times at Walmart and Target suggests that as YoY visits have picked up, dwell times have come down – perhaps reflecting a normalization of consumers’ shopping patterns. With inflation stabilizing and gas prices lower than they were in 2022 and 2023, customers may feel less pressure to consolidate shopping trips than they have in recent years.
In contrast, Costco’s comparatively long dwell times have remained stable over the past several years. The warehouse club’s bulk offerings, plentiful free samples, and inexpensive food court encourage shoppers to spend more time browsing the aisles than they would at other retailers. And even if mission-driven shopping continues to subside, Costco customers will likely keep on making extra-long shopping trips.
While inflation is cooling faster than expected, prices remain high, and new players are stepping into the retail space occupied by Walmart, Target, and Costco – especially dollar stores. Though higher-income customers increasingly rely on the three retail giants for many of their purchases, customers of more modest means are often drawn to the rock-bottom prices offered at dollar stores.
And analyzing the cross-shopping patterns of visitors to Walmart, Target, and Costco shows that growing shares of visitors to the three behemoths also visit Dollar Tree on a regular basis. In Q2 2019, the share of visitors to Walmart, Target, and Costco who frequented Dollar Tree at least three times ranged between 9.8% and 13.7%. But by Q2 2024, that share rose to 16.7%-21.6%.
Dollar Tree is leaning into this increased interest among superstore shoppers. Over the past year, Dollar Tree added some 350 Dollar Tree locations, even as it shuttered nearly 400 Family Dollar stores. And the chain recently acquired the leases of some 170 99 Cents Only Stores – offering Dollar Tree access to a customer base accustomed to buying everything from groceries to household goods. As Dollar Tree continues to grow its footprint and expand its food offerings, the chain will be better positioned than ever to provide a real challenge to Walmart, Target, and Costco.
Still, the three retail giants each have unique offerings that distinguish them from dollar stores. This next section examines what sets Walmart, Target, and Costco apart – and how they can continue to strengthen their competitive edge.
With competition on the rise, Walmart, Target, and Costco must display agility in navigating an ever-evolving market landscape. This section dives into the data for each chain’s more successful metro areas to see what factors are helping them outperform nationwide averages – and what metrics the retailers can harness to try to replicate these results nationwide.
Target recently expanded its Target Circle Rewards program, rolling out three new tiers for its 100 million members. And this focus on loyalty has proven successful for the chain. Demographic and visitation data reveal a strong correlation between the median household incomes (HHIs) of Target locations’ captured markets across CBSAs (core-based statistical areas), and their share of loyal visitors in Q2 2024: CBSAs where Target locations’ captured markets had higher median HHIs also tended to draw more repeat monthly visitors.
Target’s captured markets in the Los Angeles-Long Beach-Anaheim, LA CBSA, for example, featured a median HHI of $89.8K in Q2 2024 – and 48.0% of the chain’s LA visitors frequented a Target at least twice a month during the quarter. Target stores in the Chicago-Naperville-Elgin, IL-IN-WI CBSA, where the chain’s captured markets had a median HHI of $88.7K in Q2 2024, also had a loyalty rate of 48.0%.
Target generally attracts a more affluent audience than Walmart. And even as the superstore slashes prices to attract more price-conscious consumers, the retailer is also taking steps likely to enhance its popularity among higher-income households. In April 2024, Target debuted a paid membership tier within its loyalty program offering perks like same-day delivery for a fee. Maintaining and expanding these premium offerings will be key for Target as it seeks to attract more affluent customers and replicate its high-performing results in CBSAs nationwide.
The persistent inflation of the past few years, while challenging for some retailers, has also created new opportunities – particularly for wholesalers. Membership warehouse clubs, including Costco, are gaining popularity among younger shoppers, a cohort often looking for new ways to stretch their more limited budgets. An October 2023 survey revealed that nearly 15% of respondents aged 18 to 24 and 17% of those aged 25 to 30 shop at Costco.
A closer look at some of Costco’s best-performing CBSAs for YoY visit-per-location growth highlights the significance of these younger shoppers: In H1 2024, the company’s YoY visit-per-location growth was strongest in areas with higher-than-average shares of young urban singles.
For example, the San Diego-Chula Vista-Carlsbad, CA CBSA experienced visit-per-location growth of 10.4% YoY in H1 2024, while the nationwide average stood at 7.9%. And the CBSA’s share of Young Urban Singles, defined by the Spatial.ai: PersonaLive dataset as “singles starting their careers in trade and service jobs,” was 12.1%, well above Costco’s nationwide average of 7.3%.
Walmart is a one-stop shop for everything from affordable groceries to clothing to home furnishings, making it especially popular among families. The retailer actively courts this segment with baby offerings designed to meet the needs of both kids and parents, virtual offerings in the metaverse, and collectible toys.
And visitation data reveals a connection between the extent of different Walmart locations’ YoY visit growth and the share of households with children in their captured markets.
In H1 2024, nationwide visits to Walmart increased by 4.1% YoY, while the share of households with children in the chain’s overall captured market hovered just under the nationwide baseline. But in some CBSAs where Walmart outpaced this nationwide growth, the retail giant also proved especially adept at attracting parental households – outpacing relevant statewide baselines.
In Boston-Cambridge-Newton, MA, for example, Walmart experienced 5.0% YoY visit growth in H1 2024 – while the share of households with children in the chain’s local captured market stood 7% above the Massachusetts state average. And in Grand Rapids-Kentwood, MI, where Walmart’s share of parental households outpaced the Minnesota state average by an even wider 15% margin, the retailer saw impressive 7.3% YoY visit growth. This pattern repeated itself in other metro areas, suggesting that there may be a correlation between local Walmart locations’ visit growth and their relative ability to draw households with children.
Walmart can continue solidifying its market position by leaning into its family-oriented offerings and expanding its footprint in regions with growing populations of young families.
Walmart, Target, and Costco all experienced YoY visit growth in the final months of H1 2024, with Costco leading the way. And though the three chains still face considerable challenges, each one brings unique strengths to the table. By continuously innovating and responding to changing market conditions, Walmart, Target, and Costco can not only overcome obstacles but also leverage them to reinforce their market positions and drive continued growth.
