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In the spirit of retail quarterly earnings season, it has been eye-opening to see the disparity in performances, especially among specialty retailers. This week, Urban Outfitters, Inc. (URBN) reported first quarter earnings, with comparable dollar sales up 4.6%, a strong growth number compared to many in the industry. Urban Outfitters, Inc. benefitted from a diversified retail portfolio, with the growth stemming from its Anthropologie, Free People and Nuuly brands, both in-store and online, while its namesake brand continues to be challenged over the past few years. As far as specialty apparel retailers go, the company has done a fantastic job of creating retail experiences that are unique and irreplaceable for their customers, and finding true competitors of its brands proves difficult.
Looking at Q1 2024 traffic performance, Free People and Anthropologie led the way, echoing the earnings release. Free People visits, excluding FP Movement, grew 8% year-over-year and Anthropologie saw an increase in traffic of 5% year-over-year. Urban Outfitters, on the other hand, actually saw traffic levels beat sales performance, with traffic flat compared to Q1 2023.
Anthropologie, despite retail and economic headwinds, has tightened up its value proposition to consumers and has a clear vision of its target shopper. Using Spatial.ai’s PersonaLive segmentation (as shown below), Anthropologie attracted the most visits from Ultra Wealthy Families in Q1 2024, followed by Young Professionals and Sunset Boomers. Compared to the other portfolio brands, Anthropologie attracts a higher median income consumer and over indexes with more mature consumers, two groups that have higher levels of spending power in today’s economy and haven’t decidedly altered their retail habits as much as middle- and lower-income shoppers. Anthropologie has clearly benefited from the strength of its visitors, and its curated multi-category retail experience that has shielded the chain from the struggles of other home furnishing and apparel retailers. It will be interesting to watch if the brand is able to continue to maintain its success through the remainder of the year if economic conditions become further challenged.
Free People appeals to a consumer somewhat in the middle of both Anthropologie and Urban Outfitters, and has been able to capitalize on Anthropologie’s success and hedge against Urban Outfitters’ struggles. Free People’s design sense makes it a crowd-favorite but also a source for many “dupes” on other retail platforms; however, the influx of similar designs haven’t seen to slow their momentum. FP Movement, the brand’s athleisure line that also has stand alone retail locations, has been another lever for growth. Using Placer.ai to look at three FP movement locations compared to the Free People chain, FP movement grew visits faster than the parent brand, and also had a higher dwell time. Urban Outfitters, Inc. disclosed that dollar sales for Free People were up almost 18% in Q1 2024, but the company doesn't break out sales between FP Movement and Free People. There are some risks with the athleisure market, as brands face softening performance and consumers shift away from more discretionary apparel categories. FP movement has created core and in-demand silhouettes that drive traffic, but with fashion trends, that may not be enough to sustain long-term visit growth.
Finally, there’s the lackluster performance from the namesake brand. Younger adults have so many retail options at their fingertips that retailers who cater to these consumers can often be lost in the shuffle, especially with so much competition coming from online and offline retail. Urban Outfitters long curated a distinct look and feel, as well as a mix of national brands and private labels that differentiated it from competitors; with retailers in similar price bands like Abercrombie & Fitch staging a comeback, Urban Outfitters has lost its footing. Looking into the consumer segments using Spatial.ai’s PersonaLive, Educated Urbanites and Young Professionals top Urban Outfitters segmentation; price-sensitivity could be making younger shoppers more discerning in their apparel purchases. Off-price may also be a factor here and provide higher levels of competition for the customer base. Urban Outfitters holds a lot of brand value, and if the brand is able to right size assortments and value in the short term, there could be upside to bring it closer to its sister brands.
Compared to most of the specialty retail narratives out in the market, Urban Outfitters, Inc. has a lot of positive momentum with a few of its brands. Nuuly, its subscription rental service, was also called out as a positive highlight of the quarter, and learnings about consumer preferences through that service could help to inform the go-forward strategies at Anthropologie, Free People and Urban Outfitters. There is a lot to celebrate as it relates to its discretionary retail fleet, despite the challenges at the namesake brand, and proves that specialty retail that still feels “special” has consumers' lasting attention.
Earlier this week, we attended the National Restaurant Association show in Chicago and had the chance to speak with a wide range of restaurant owner/operators (large chains, small chains, independents, and franchisees) as well as their vendors, distributors, and other technology solutions. We’ve already seen some great recaps of the event (including one from Nation’s Restaurant News), but we thought we’d offer some of our own observations from the event.
Fierce Fight for Visits Amid New Sources of Competition
We discussed this during our trade show preview last week, but concerns about slowing foot traffic trends and increased competition with alternative food retail channels like grocery, dollar stores, and convenience stores was easily the number one topic of discussion at the event. Most operators we spoke with acknowledged flat or year-over-year declines in comparable visits, which is consistent with the year-to-date on most of the restaurant subcategories we monitor (below)
Most of the restaurant executives we spoke to at the event also noted the improvements of prepared food offerings in the grocery and c-store channels as a competitive headwind. One executive even told us that “C-stores have gone from copying QSR category innovations to setting the bar higher in many ways.” We’ve seen this in the channel shift taking place across the food retail category, which we touched upon last week.
As it pertains to competition in the months ahead, operators across all categories admitted that they were curious about the ripple effect of McDonald’s plans to launch a $5 value menu on June 25 (which will run for a month). We’re already starting to see competitors try to front-run McDonald’s $5 value menu, and there will likely be others who introduce similar promotions in the coming weeks. While these offers are likely to help QSR chains recapture some of the visits lost to other channels, these chains will likely need to continue with their value messaging in the back half of the year (especially with the rollbacks taking place at Walmart, Target, and other superstore chains) while also committing to more menu innovation than we’ve seen year-to-date.
Coffee’s Momentum Continues–With A Notable Outlier
One of the two subcategories that is seeing year-over-year increases is coffee. Some of this growth has been fueled by expansion plans of Dutch Bros, 7 Brew Coffee, 151 Coffee, Scooter’s Coffee, Philz Coffee, particularly in the South and Southeast U.S. (something we touched on late last year). Below, we’ve put together a custom chain of drive-thru focused chains versus the category average to put some context behind where the growth in the category is coming from (although the category itself as a whole continues to see healthy growth).
Starbucks–which reported a 7% decline in comparable transactions during its January-March 2024 quarter–is one of the key outliers from this category. Starbucks CEO Laxman Narasimhan called the company’s performance “disappointing” on its most recent update call. There have been no shortage of opinions on why the chain has underperformed, but our data continues to indicate that occasional visitors are the root of the softer visitation trends, much like they were last quarter. To reverse these trends, the company has already launched flavored pearls for a series of summer seasonal drinks and an improved blueberry muffin. Additionally, the company plans to launch more sugar-free customization options (including syrups) as well as a zero-to-low-calorie energy beverage.
Casual Dining’s Quiet Comeback
The other restaurant category posting seeing year-over-year growth may come as a surprise: casual-dining chains. After a slow start to the year due to weather, the category has generally seen low-single-digit growth on a year-over-year basis (something Placer’s blog team pointed out a few weeks ago). Several executives in the casual dining space we spoke with noted that they had started to see improving trends, with a few citing a narrowing price gap with QSR/fast casual chains (in other words, if consumers are going to pay the same price per entree, they’ll gravitate toward casual dining) as well as a continued propensity to spend for events/holidays (a theme we touched on repeatedly in the past).
Where is the growth coming from? There are a couple of expected categories, including steakhouses, breakfast-first concepts, and eatertainment. Asian concepts have also performed well this year, helped by growth from experiential concepts like Kura Sushi and GEN Korean BBQ.
On the other end of the spectrum, we see weakness in Mexican and Seafood concepts. Seafood should not come as a surprise given that one of other notable development in the restaurant industry this week was Red Lobster’s bankruptcy announcement. The company's Endless Shrimp promotion has been widely blamed for the company's bankruptcy filing--and our visitation data does show a spike in visits coinciding with the promotion--but there were certainly other factors such as unfavorable lease terms that played a part.
It’s been nicknamed the “Superbowl for Dealmakers” and this year’s packed ICSC Las Vegas conference paved the way for tons of pipelines. All had comfy shoes on, phones ready to scan badges, and everyone was eager to learn and network.
Based on the buzz in the booths, it’s clear that dealmakers were happy to be able to meet face-to-face. High-demand retail locations are staying strong and able to command higher rents. However, there are also landlords in areas with less demand willing to negotiate and toss in reduced rent or concessions. With higher costs for construction and borrowing and limited supply in hot areas, both landlord and tenants are getting creative with solutions. Some are carving up vacant anchors for non-traditional tenants or experimenting with smaller footprints and more curated merchandise. Kroger is launching new concepts within the ethnic grocery space. Meanwhile others are taking advantage of large spaces to create experiential flagships, as we noted in the panel on “Shifting Store Formats” that Placer participated in, along with Kohl’s, CBRE, and Colliers. Other fascinating panels included understanding the impact of influencer marketing and innovations that are revolutionizing the shopping experience.
In a panel on “The Office - The Effect of Flexible Work Models on Foot Traffic,” a panel including Avison Young, CBRE, and Placer discussed how shoppers are shifting their times and locations for shopping, dining, fitness, and entertainment as a result of migration and varying remote and hybrid work schedules.
Over the course of the conference, one city kept popping up in conversation and that city was Miami. Whether it was cocktail party conversation, pub crawl chit chat, or booth banter, people kept lauding how this city barely missed a beat during COVID, new residents kept flocking in, its vibrant and cosmopolitan feel, and the opportunity for new concepts and store openings here. Let’s unpack some of the things happening in Miami.
Migration
Using Placer’s Migration Dashboard and honing on our Migration Draw tool, we see that Miami’s coastal areas are extremely attractive to residents.
Some of the factors that most affect Miami’s desirability include weather, being pedestrian-friendly, and superior access to restaurants and nightlife.
There are of course some trade-offs as well, such as higher housing costs and overall cost of living than many transplants’ original locales.
Nightlife
If you want to party in the city where the heat is on, Miami's the place for you. Taking a look at the time period of 6pm- midnight, nightlife visits in Miami outnumber those in East Williamsburg, Capitol Hill, or Deep Ellum.
Return to Office
In an interesting twist, Miami also leads in having the highest rate of return-to-office. How do they manage to do that if they’ve been out partying? It’s likely a work hard/play harder mentality. Or, like many at ICSC mentioned, Miami never really closed down as much as other cities during Covid, hence there is less to recover from. Placer's Office Dashboard notes that Miami is in the lead with the highest recovery rate.
Shopping and Entertainment
For those who love all things retail, there are plenty of shopping centers and shopping areas to choose from. Brickell City Centre has seen some of the largest year-over-year increases. Meanwhile, Aventura’s April visits are up considerably compared to last year. The Miami Design District, which the Anchor has written about previously, has also been showing consistent year-over-year growth this year.
DICK’S Sporting Goods is one of the best-known names in the sportswear and sporting goods retail segment, with more than 700 stores across the country. The company, which also operates several smaller banners including its interactive House of Sport, has thrived in recent years, buoyed by a continued interest in health and wellness.
How is the chain faring into 2024? We took a look at the latest location intelligence to find out.
DICK'S was a major pandemic-era winner, sustaining visit gains through 2021 and 2022 and into early 2023. And though YoY visits slowed as 2023 wore on, DICK’s ended last year in a strong position, reporting the largest sales quarter of its history in Q4 2023.
And in early 2024, DICK’s largely held on to its gains. Like many retailers, DICK’S saw YoY foot traffic fall in January, as unusually cold and stormy weather kept many shoppers at home. But in February and March, the chain’s YoY visit gap narrowed considerably, with foot traffic hovering just under 2023 levels – no small feat for a discretionary chain in an environment marked by stubbornly elevated prices and flagging consumer confidence.
During most analyzed months, DICK’S outperformed both traditional Apparel and Sportswear & Athleisure retailers. And though the chain saw monthly YoY foot traffic drop once again in April, an analysis of weekly data shows that it entered May on an upswing.
Indeed, zooming into weekly visits to DICK’S shows that only during the week of April 8th, 2024 did the chain experience a large visit gap. And visits to the sportswear company began to trend upward towards the end of April and beginning of May – with YoY visits growing by 1.9% during the week of April 29th, and by 0.7% in the week of May 6th. The company also outperformed the Apparel and Sportswear segments in all but one of the analyzed weeks – Sportswear retailers had a slightly stronger showing than DICK’S did for the week of April 22.
Experiential retail has emerged as a significant success story in recent years, and DICK’S has enthusiastically embraced the trend. In 2021, the company introduced its House Of Sport concept, offering visitors the opportunity to browse athletic gear or try their hand at a climbing wall or a batting cage.
The concept quickly gained traction, expanding to fourteen locations, with several more slated to open in 2024 alone. And an analysis of visitation patterns at DICK’S House Of Sport locations shows why the model is such a powerful one.
In Q1 2024, YoY visits to the three original House of Sport locations in Victor, NY, Minnetonka, MN, and Knoxville TN – the only ones operational at the start of 2023 – increased by 4.8%. So as DICK’S continues to expand its portfolio of House of Sport locations, existing ones are also drawing bigger crowds.
The original House of Sport locations also drew more extended visits in Q1 2024 than other DICK’s locations – with a remarkable 40.7% of visits lasting more than 30 minutes. With the success of House of Sport under its belt, DICK’S has begun further diversifying its fleet with a new store format that brings an interactive retail experience to the chain’s traditional store type.
DICK’S continues to outperform the wider Apparel and Sportswear retail segments, and its expanding House of Sport concept is meeting healthy and growing demand. As the company continues to lean into its experiential offerings, will the chain’s positive momentum accelerate further?
Visit placer.ai for the latest data-driven retail insights.
As cars get more expensive, demand for repairs rises – and auto part chains are reaping the benefits. We analyzed the visit data for four leading auto part chains – AutoZone, O'Reilly Auto Parts, NAPA Auto Parts and Advance Auto Parts – and dove into O’Reilly Auto Parts’ recent growth to understand what may be driving success in this flourishing segment.
Auto parts chains are having a moment. With vehicle prices significantly higher than before COVID, many consumers would rather fix their cars than purchase new ones. At the same time, inflation has begun to subside, leaving people with more room in their budgets for non-essential maintenance and repairs.
Following a drop in December 2023, YoY visits to AutoZone, O’Reilly Auto Parts, Advance Auto Parts, and NAPA Auto Parts began to pick up in January 2024 – despite unusually cold and stormy weather that left many consumers hunkered down at home. And between February and April, YoY visits to the four chains remained nearly uniformly elevated.
On a quarterly basis, O’Reilly Auto Parts saw the biggest YoY visit increase, despite lapping a strong 2023. The chain, which drew 32.1% of total visits to the four brands in Q1, saw quarterly YoY foot traffic increase by 5.1%. AutoZone, which received 40.1% of quarterly visits to the four chains, saw quarterly YoY visits increase by 3.5%. And Advance Auto Parts and NAPA Auto Parts both saw quarterly YoY visits increase by 1.7%.
One strategy that has likely helped O’Reilly Auto Parts stay ahead of the pack is its much-touted loyalty program, recently ranked by Newsweek as one of the best in the nation.
Location intelligence shows that since COVID, O’Reilly Auto Parts has seen a steady increase in the loyalty of its customer base. And in April 2024, O’Reilly Auto Parts boasted the most loyal customer base of the four analyzed chains – with 52.0% of visits made by individuals that frequented the chain at least twice during the month. But other auto chains, including AutoZone, also enjoyed significant shares of visits by repeat customers – showing that there’s plenty of room at the top in the auto parts space.
The auto parts industry is poised for success in 2024, with leading chains like O'Reilly Auto Parts, AutoZone, Advance Auto Parts, and NAPA Auto Parts demonstrating resilience and growth. How will these chains continue to perform as the year wears on?
Visit placer.ai to find out.
We looked at nationwide and regional visitation patterns for CAVA to understand how the fast-growing fast-casual chain is performing across its major markets.
CAVA – which operated a little over 300 locations by the end of 2023 – is growing rapidly, with plans to reach 1,000 locations by 2032. The chain has seen consistent year-over-year (YoY) visit growth in most of its major markets, with a 23.6% YoY overall increase in nationwide visits in Q1 2024 – in large part due to its ongoing expansion.
CAVA is headquartered in Washington, D.C., and currently, most of its venues are located in the mid-Atlantic and southeastern United States. But the chain also has a strong presence in Texas and California and operates restaurants in a handful of additional states. Recently, CAVA entered the Midwest with its first Chicago location – and has plans to extend its reach even further. So what do CAVA’s various markets have in common – and what sets them apart?
Nationwide, the median household income (HHI) in CAVA’s captured market trade area is higher than the US median HHI – and diving into the regional markets indicates that this trend persists across regional markets.
In most states with a major CAVA presence – including Texas, Virginia, California, North Carolina, Georgia, and Maryland – the median HHI in CAVA’s trade area is 11% to 24% higher than the statewide median. Even in Florida, where the chain’s trade area HHI is closest to the statewide median, households in CAVA’s captured market are still slightly more affluent than in Florida as a whole.
But while the chain seems to attract a similar demographic across states, diving into the hourly visitation patterns in CAVA’s various markets indicates that dining habits differ between regions.
In Texas, Georgia, Florida, and North Carolina, the share of 11:00 AM - 10:00 PM CAVA visits taking place during the lunchtime daypart (11:00 AM - 2:00 PM) ranges from 35.5% to 36.9% – at or above the nationwide average of 35.4%. But in Virginia and Maryland, and especially California, the lunchtime rush is more subdued. In these states, the afternoon and evening dayparts tend to be busier than in the other analyzed states – with California in particular seeing 35.7% of visits taking place between 6:00 PM and 10:00 PM.
Identifying similarities and differences between the visitor bases in CAVA’s various markets can help the company identify ideal locations, optimize staffing needs, and tailor promotional efforts as it continues to enter new markets and open additional restaurants in existing ones.
For more data-driven dining insights, visit placer.ai/blog.
This report includes data from Placer.ai Data Version 2.0, which implements improvements to our extrapolation capabilities, adds short visit monitoring, and enhances visit detection.
Grabbing a coffee or snack at a convenience store is a time-honored road trip tradition – but increasingly, Convenience Stores (C-Stores) have also emerged as places people go out of their way to visit.
Convenience stores have thrived in recent years, making inroads into the discretionary dining space and growing both their audiences and their sales. Between April 2023 and March 2024, C-Stores experienced consistent year-over-year (YoY) visit growth, generally outperforming Overall Retail. Unsurprisingly, C-Stores fell behind Overall Retail in November and December 2023, when holiday shoppers flocked to malls and superstores to buy gifts for loved ones. But in January 2024, the segment regained its lead, growing YoY visits even as Overall Retail languished in the face of an Arctic blast that had many consumers hunkering down at home.
C-Stores’ current strength is partially due to the significant innovation by leading players in the space: Chains like Casey’s, Maverik, Buc-ee’s, and Rutter’s are investing in both in their product offerings and in their physical venues to transform the humble C-Store from a stop along the way into a bona fide destination. Dive into the data to explore some of the key strategies helping C-Stores drive consumer engagement and stay ahead of the pack.
While chain expansion may explain some of the C-Store segment growth, a look at visit-per-location trends shows that demand is growing at the store level as well. Over the past year (April 2023 to March 2024), average visits per location on an industry-wide basis grew by 1.8%, compared to the year prior (April 2022 to 2023).
And within this growing segment, some brands are distinguishing themselves and outperforming category averages. Casey’s, for example, saw the average number of visits to each of its locations increase by 2.3% over the same time frame – while Maverik, Buc-ee’s and Rutter’s saw visits per location increase by 3.2%, 3.4% and 3.9%, respectively.
Each in its own way, Casey’s, Maverik, Buc-ee’s, and Rutter’s, are helping to transform C-Stores from pit stops where people can stretch their legs and grab a cup of coffee to destinations in and of themselves.
Midwestern gas and c-store chain Casey’s – famous for its breakfast pizza and other grab-and-go breakfast items – has emerged as a prime spot for fast food pizza lovers to grab a slice first thing in the morning. And Salt Lake City, Utah-based Maverik – which recently acquired Kum & Go and its 400-plus stores – is also establishing itself as a breakfast destination thanks to its specialty burritos and other chef-inspired creations.
Casey’s and Maverik’s popular breakfast options are likely helping the chains receive its larger-than-average share of morning visits: In Q1 2024, 16.3% of visits to Maverik and 17.5% of visits to Casey’s took place during the 7:00 AM - 10:00 AM daypart, compared to just 14.9% of visits to the wider C-Store category.
Psychographic data from the Spatial.ai’s FollowGraph dataset – which looks at the social media activity of a given audience – also suggests that Casey’s and Maverik’s have opened stores in locations that allow them to reach their target audience. Compared to the average consumer, residents of Casey’s potential market are 7% more likely to be “Fast Food Pizza Lovers” than both the average consumer and the average C-Store trade area resident. Residents of Maverik’s potential market are 16% more likely than the average consumer to be “Mexican Food Enthusiasts,” compared to residents of the average C-Store’s trade area who are only 1% more likely to fall into that category.
With both chains expanding, Casey’s and Maverik can hope to introduce new audiences to their unique breakfast options and solidify their hold over the morning daypart within the C-Store space over the next few years.
Everything is said to be bigger in the Lone Star State, and Texas-based convenience store chain Buc-ee’s – holder of the record for the worlds’ largest C-Store – is no exception. With a unique array of specialty food items and award-winning bathrooms, Buc-ee’s has emerged as a well-known tourist attraction. And the popular chain’s status as a visitor hotspot is reflected in two key metrics.
First, Buc-ee’s attracts a much greater share of weekend visits than other convenience store chains. In Q1 2024, 39.6% of visits to Buc-ee’s took place on the weekends, compared to just 28.3% for the wider C-Store industry. And second, Buc-ee’s captured markets feature higher-than-average shares of family-centric households – including those belonging to Experian: Mosaic’s Suburban Style, Flourishing Families, and Promising Families segments.
Rather than merely a place to stop on the way to work, Buc-ee’s has emerged as a favored destination for families and for people looking for something fun to do on their days off.
Buc-ee’s isn’t the only C-Store chain that believes bigger is better. Pennsylvania-based Rutter’s is increasing visits and customer dwell time by expanding its footprint – both in terms of store count and venue size. New stores will be 10,000 to 12,000 square feet – significantly larger than the industry average of around 3,100 square feet. And in more urban areas, where space is at a premium, the company is building upwards.
Rutter’s added a second floor to one of its existing locations in York, PA in December 2023. The remodel, which was met with enthusiasm by customers, provided additional seating for up to 30 diners, a beer cave, and an expanded wine selection. And in Q1 2024, the location experienced 15.6% YoY visit growth – compared to a chainwide average of 7.6%. Visitors to the newly remodeled Rutter’s also stayed significantly longer than they did pre-renovation. The share of extended visits to the store (longer than ten minutes) grew from 20.8% in Q1 2023 to 27.0% in Q1 2024 – likely from people browsing the chain’s selection of beers or grabbing a bite to eat.
Convenience stores are flourishing, transforming into some of the most exciting dining and tourist destinations in the country. Today, C-Store customers can expect to find brisket sandwiches, gourmet coffees, or craft beers, rather than the stale cups of coffee of old. And the data shows that customers are receptive to these innovations, helping drive the segment’s success.
The first quarter of 2024 was generally a good one for retailers. Though unusually cold and stormy weather left its mark on the sector’s January performance, February and March saw steady year-over-year (YoY) weekly visit growth that grew more robust as the quarter wore on.
March ended on a high note, with the week of March 25th – including Easter Sunday – seeing a 6.1% YoY visit boost, driven in part by increased retail activity in the run-up to the holiday. (Last year, Easter fell on April 9th, 2023, so the week of March 25th is being compared to a regular week.)
Though prices remain high and consumer confidence has yet to fully regain its footing, retail’s healthy Q1 showing may be a sign of good things to come in 2024.
Drilling down into the data for leading retail segments demonstrates the continued success of value-priced, essential, and wellness-related categories.
Discount & Dollar Stores led the pack with 11.2% YoY quarterly visit growth, followed by Grocery Stores, Fitness, and Superstores – all of which outperformed Overall Retail. Dining also enjoyed a YoY quarterly visit bump, despite the segment’s largely discretionary nature. And despite the high interest rates continuing to weigh on the housing and home renovation markets, Home Improvement & Furnishings maintained just a minor YoY visit gap.
Discount & Dollar Stores experienced strong YoY visit growth throughout most of Q1 – and as go-to destinations for groceries and other other essential goods, they held their own even during mid-January’s Arctic blast. In the last week of March, shoppers flocked to leading discount chains for everything from chocolate Easter bunnies to basket-making supplies – driving a remarkable 21.5% YoY visit spike.
Dollar General continued to dominate the Discount & Dollar Store space in Q1, with visits to its locations accounting for nearly half of the segment’s quarterly foot traffic (44.7%). Next in line was Dollar Tree, followed by Family Dollar and Five Below. Together, the four chains – all of which experienced positive YoY quarterly visit growth – drew a whopping 91.6% of quarterly visits to the category.
Rain or shine, people have to eat. And like Discount & Dollar Stores, traditional Grocery Stores were relatively busy through January as shoppers braved the storms to stock up on needed items. Momentum continued to build throughout the quarter, culminating in a 10.5% foot traffic increase in the week ending with Easter Sunday.
Like in other categories, it was budget-friendly Grocery banners that took the lead. No-frills Aldi drove a chain-wide 24.4% foot traffic increase in Q1, by expanding its fleet – while also growing the average number of visits per location. Other value-oriented chains, including Trader Joe’s and Food Lion, experienced significant foot traffic increases of their own. And though conventional grocery leaders like H-E-B, Kroger, and Albertsons saw smaller visit bumps, they too outperformed Q1 2023 by meaningful margins.
January is New Year’s resolution season – when people famously pick themselves up off the couch, dust off their trainers, and vow to go to the gym more often. And with wellness still top of mind for many consumers, the Fitness category enjoyed robust YoY visit growth throughout most of Q1 – despite lapping a strong Q1 2023.
Predictably, Fitness’s visit growth slowed during the last week of March, when many Americans likely indulged in Easter treats rather than work out. But given the category’s strength over the past several years, there is every reason to believe it will continue to flourish.
For Fitness chains, too, cost was key to success in Q1 – with value gyms experiencing the biggest visit jumps. EōS Fitness and Crunch Fitness, both of which offer low-cost membership options, saw their Q1 visits skyrocket 28.9% and 22.0% YoY, respectively – helped in part by aggressive expansions. At the same time, premium and mid-range gyms like Life Time and LA Fitness are also finding success – showing that when it comes to Fitness, there’s plenty of room for a variety of models to thrive.
Superstores – including wholesale clubs – are prime destinations for big, planned shopping expeditions – during which customers can load up on a month’s supply of food items or stock up on home goods. And perhaps for this reason, the category felt the impact of January’s inclement weather more than either dollar chains or supermarkets – which are more likely to see shoppers pop in as needed for daily essentials.
But like Grocery Stores and Discount & Dollar Stores, Superstores ended the quarter with an impressive YoY visit spike, likely fueled by Easter holiday shoppers.
As in Q4 2023, membership warehouse chains – Costco Wholesale, BJ’s Wholesale Club, and Sam’s Club – drove much of the Superstore category’s positive visit growth, as shoppers likely engaged in mission-driven shopping in an effort to stretch their budgets. Still, segment mainstays Walmart and Target also enjoyed positive foot traffic growth, with YoY visits up 3.9% and 3.5%, respectively.
Moving into more discretionary territory, Dining experienced a marked January slump, as hunkered-down consumers likely opted for delivery. But the segment rallied in February and March, even though foot traffic dipped slightly during the last week of March, when many families gathered to enjoy home-cooked holiday meals.
Coffee Chains and Fast-Casual Restaurants saw the largest YoY visit increases, followed by QSR – highlighting the enduring power of lower-cost, quick-serve dining options. But Full-Service Restaurants (FSR) also saw a slight segment-wide YoY visit uptick in Q1 – good news for a sector that has yet to bounce back from the one-two punch of COVID and inflation. Within each Dining category, however, some chains experienced outsize visit growth – including favorites like Dutch Bros. Coffee, Slim Chickens, In-N-Out Burger, and Texas Roadhouse.
Since the shelter-in-place days of COVID – when everybody had their sourdough starter and DIY was all the rage – Home Improvement & Furnishings chains have faced a tough environment. Many deferred or abandoned home improvement projects in the wake of inflation, and elevated interest rates coupled with a sluggish housing market put a further damper on the category.
Against this backdrop, Home Improvement & Furnishings’ relatively lackluster Q1 visit performance should come as no surprise. But the narrowing of the visit gap in March – which also saw one week of positive visit growth – may serve as a promising sign for the segment. (The abrupt foot traffic drop during the week of March 25th, 2024 is likely a just reflection of Easter holiday shopping pattern.)
Within the Home Improvement & Furnishings space, some bright spots stood out in Q1 – including Harbor Freight Tools, which saw visits increase by 10.0%, partly due to the brand’s growing store count. Tractor Supply Co., Menards, and Ace Hardware also registered visit increases.
January 2024’s stormy weather left its mark on the Q1 retail environment, especially for discretionary categories. But as the quarter progressed, retailers rallied, with healthy YoY foot traffic growth that peaked during the last week of March – the week of Easter Sunday. All in all, retail’s positive Q1 performance leaves plenty of room for optimism about what’s in store for the rest of 2024.
This report includes data from Placer.ai Data Version 2.0, which implements improvements to our extrapolation capabilities, adds short visit monitoring, and enhances visit detection.
Over the past year, Fast-Casual & Quick-Service Restaurant (QSR) chains have thrived, consistently outperforming the Full-Service Dining segment with positive year-over-year (YoY) visit growth every quarter since 2023. In this white paper, we dive into the data for leading dining chains to take a closer look at what’s driving visitors to the QSR segment and what other dining categories can learn from fast-food’s success.
One of the key factors separating QSR chains – aptly known as “fast food” – from the rest of the dining industry is the speed at which diners can get a ready-to-eat meal in their hands. And within the QSR space, speed of service is one of the ways chains differentiate themselves from their competition.
Leading fast-food chains are investing heavily in technologies and systems designed to help them serve customers ever more quickly:
Taco Bell’s “Touch Display Kitchen System” is designed to optimize cooking operations and improve wait times, while the chain’s Go Mobile restaurant format seeks to alleviate bottlenecks in the drive-thru lane. Chick-fil-A also has dedicated channels for quick mobile order pick-up and is planning four-lane drive-thrus with second-floor kitchens to get meals out even faster. And to save time at the drive-thru, Wendy’s is experimenting with generative AI and developing an underground, robotic system to deliver digital orders to designated parking spots within seconds.
And location intelligence shows that all three chains are succeeding in reducing customer wait times. Over the past four years, Taco Bell, Chick-fil-A, and Wendy’s have seen steady increases in the share of visits to their venues lasting less than 10 minutes.
The data also suggests that investment in speed of service can increase overall visitation to QSR venues.
In late 2022, McDonald’s opened a to-go-only location outside of Dallas, TX with a lane dedicated to mobile order fulfillment via a conveyor belt. And in Q1 2024, this venue not only had a larger share of short visits compared to the other McDonald’s locations in the region, but also more visits compared to the McDonald’s average visits per venue in the Dallas-Fort Worth CBSA.
This provides further support for the power of fast order fulfillment to drive QSR visits, with customers motivated by the prospect of getting in and out quickly.
The success of the fast-food segment is even driving other restaurants to borrow typical QSR formats – especially during time slots when people are most likely to grab a bite to eat on the go.
In September 2023, full-service leader Applebee’s opened a new format: a fast casual location focusing on To Go orders in Deer Park, NY, featuring pick-up lockers for digital orders and limited dine-in options without table service.
And the new format is already attracting outsized weekday and lunchtime crowds. In Q1 2024, 20.5% of visits to the chain’s To Go venue took place during the 12:00 PM - 2:00 PM time slot, while the average Applebee’s in the New York-Newark-Jersey City CBSA received less than 10% of its daily visits during that daypart. The new restaurant also drew a significantly higher share of weekday visits than other nearby venues.
This suggests that takeaway-focused venues could help full-service chains grow their visit share during weekdays and the coveted lunch rush, when consumers may be less inclined to have a sit-down meal.
An additional factor contributing to QSR and Fast Casual success in 2024 may be the rise of chicken-based chains. Chicken is a versatile ingredient that has remained relatively affordable, which could be contributing to its growing popularity and the rapid expansion of several chicken chains.
Comparing the relative visit share (not including delivery) of various sub-segments within the wider Fast Casual & QSR space showed that the share of visits to chains with chicken-based menus has increased steadily between 2019 and 2023: In Q1 2024, 15.3% of Fast Casual & QSR visits were to a chicken restaurant concept, compared to just 13.4% in Q1 2019.
The strength of chicken-based concepts is also evident when comparing average visits per venue at leading chicken chains with the wider Fast Casual & QSR average.
Both Chick-fil-A, the nation’s predominant chicken chain, and Raising Cane’s, a rapidly expanding player in the fast-food chicken space, are receiving significantly more visits per venue than their Fast Casual & QSR peers: In Q1 2024, Raising Cane’s and Chick-fil-A restaurants saw an average of 153.0% and 237.7% more visits per venue, respectively, compared to the combined Fast Casual & QSR industries average.
The elevated traffic at chicken chains likely plays a part in their profitability per restaurant relative to other Fast Casual & QSR concepts with more sizable fleets.
QSR and Fast-Casual chains are also particularly adept at generating seasonal visit spikes through unique Limited Time Offers and holiday promotions adapted to the calendar.
Arby’s recently launched a 2 for $6 sandwich promotion on February 1st, with two of the three sandwich options on promotion being fish-based in an apparent attempt to entice diners eschewing meat in observance of Lent. The company also brought back a specialty fish sandwich, likely with the goal of further appealing to the Lent-observing demographic.
The offers seem to have driven significant traffic spikes, with foot traffic during the promotion period significantly higher than the January daily visit average. And traffic was particularly elevated during Lent – which this year fell on Wednesday, February 14th through Thursday, March 28th, with visits spiking on Fridays when those observing are most likely to seek out fish-based meals.
Some of the elevated visits in the second half of Q1 may be attributed to the comparison to a weaker January across the dining segment. But the success of the fish-forward promotion specifically during Lent suggests that the company’s calendar-appropriate LTO played a major role in driving visits to the chain.
Shorter-term promotions – even those lasting just a single day – can also drive major visit spikes.
Since 1991, White Castle has transformed its fast-food restaurants into a reservation-only, “fine-dining” experience for dinner on Valentine's Day. In 2024, Valentine’s Day fell on a Wednesday, and White Castle’s sit-down event drove a 11.8% visit increase relative to the average Wednesday in Q1 2024 and a 3.9% visit increase compared to the overall Q1 2024 daily average.
The elevated visit numbers over Valentine’s Day are even more impressive when considering that a full-service dining room can accommodate fewer visitors than the drive-thrus and counter service of White Castle’s typical QSR configuration. The spike in February 14th visits may also be attributed to an increased number of diners showing up throughout the day to take in the Valentine’s Day buzz.
QSR and Fast-Casual dining are having a moment. And the data shows that a combination of factors – including fast and efficient service, the rising popularity of chicken-based dining concepts, and effective LTOs – are all playing a part in the categories’ recent success.
