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Despite the individual restaurant success stories in 2023, last year was also a period of economic headwinds in the dining industry. But Darden Restaurants – and its largest chains Olive Garden, LongHorn Steakhouse, and Cheddar’s Scratch Kitchen – continued to drive foot traffic. We dove into the location analytics for these three Darden brands and took a closer look at the shifts in consumer behavior impacting the dining space.
Foot traffic in 2023 was largely positive for Olive Garden, LongHorn Steakhouse, and Cheddar’s Scratch Kitchen, with the strong visit trends likely helping drive Darden’s recent sales growth.
All three brands posted impressive YoY visit growth in Q1 2023, perhaps aided by the comparison to an Omicron-impacted, muted Q1 2022. LongHorn Steakhouse then pulled ahead of the pack in Q2 and Q3 with YoY foot traffic up 3.7% and 4.8%, respectively, before finishing the year off strong with a 3.8% YoY visit increase in Q4. But the real Darden star in Q4 was Olive Garden. The Italian-focused chain’s success was likely bolstered by the return of the Never Ending Pasta Bowl – offered from late September 2023 through mid-November – which appears to have attracted even more hungry diners than it did the previous year.
Meanwhile, YoY visits to Cheddar’s Scratch Kitchen increased during the first three quarters of 2023 and held relatively steady in Q4 – YoY visits during the last quarter of the year were down just 0.7% – highlighting the overall strength of Darden’s portfolio.
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Though 2023 was a particularly successful year for Darden foot traffic, Olive Garden, LongHorn, and Cheddar’s were not immune to this year’s arctic blast. The extreme weather in January 2024 impacted dining visits and put a damper on traffic to these chains. But once the weather warmed up in February 2024, YoY visits to Olive Garden, LongHorn, and Cheddar’s began to heat up as well – outpacing even the strong early 2023 traffic – indicating that Darden brands are likely in for another year of robust visits.
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Diving deeper into the analytics for Darden’s brands indicated that shifts in consumer behavior may be a factor in the restaurants’ recent foot traffic gains. Analysis of hourly visits to Olive Garden, LongHorn, and Cheddar’s since 2019 revealed that a greater share of visitors are now engaging with their favorite restaurants during non-traditional dayparts in the mid and late afternoon.
The share of daily Olive Garden, LongHorn, and Cheddar’s visitors visiting between 2 PM and 5:59 PM was higher in 2023 than in 2019 for all three brands. Olive Garden had the largest share of mid and late afternoon visits in 2022 at 32.6% and maintained its share of 2:00 PM to 5:59 PM visitation in 2023. Meanwhile, LongHorn and Cheddar’s share of visits during the 2:00 PM to 5:59 PM daypart continued increasing in 2023 relative to the previous year, which suggests that this trend of late afternoon and early dinner visits is becoming the new normal.
As eating out early is becoming more prevalent in the casual dining space – as well as in fine dining and steakhouse restaurants – Darden might capitalize on this trend by adding more happy hours and other late-afternoon specials to its restaurants’ menus.
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Darden’s biggest chains succeeded in driving foot traffic growth in 2023 and early 2024. Location analytics indicated that while demand for the brands is consistent, consumer behavior is always changing. How will these restaurants navigate the rest of 2024? Visit Placer.ai to find out.
This blog includes data from Placer.ai Data Version 2.0, which implements improvements to our extrapolation capabilities, adds short visit monitoring, and enhances visit detection.
Athleisure and sportswear are a go-to for consumers looking to move seamlessly between activities – from a workout to work-from-home. That functionality has kept the category running hot in recent years even while more consumers are getting back to the office and socializing. And since athleisure and sportswear are now bonafide wardrobe staples, more consumers are investing in high-end items. We dove into the data for two of the category’s biggest upscale players – Nike and lululemon – in order to take a closer look at the consumer behavior driving visit growth.
During all four quarters of 2023, Nike and lululemon saw year-over-year (YoY) foot traffic growth that surpassed the visit increases in the wider Athleisure & Sportswear space. Part of Nike’s sizable 2023 YoY visit gains were likely due to the addition of a large number of stores relative to its somewhat modest footprint. Nike is continuing to invest in own-brand stores to boost DTC business including the first U.S. Michael Jordan "World of Flight" store coming to Philadelphia, PA. Lululemon also expanded its store count – albeit more modestly – which likely also helped the company stay ahead of the competition.
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Fueled by significant store growth, Nike managed to keep YoY foot traffic positive in the first two months of 2024 despite the arctic blast that plagued overall retail visits in January.
Lululemon and the wider Athleisure & Sportswear space were less insulated from the effects of the storm, and the comparison to a strong 2023 made for mild YoY visit gaps in January 2024. But by the end of February 2024, both lululemon and the Athleisure & Sportswear space had narrowed their visit gaps and appeared to be on an upward trajectory.
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Diving deeper into the demographic data for Nike’s trade area indicated that the aggressive expansion is not the only factor driving the brand’s recent foot traffic gains. Analysis using the AGS: Demographic Dimensions dataset revealed that since the 2021 retail reopening – and specifically Q3 2021 – the median household income (HHI) of Nike’s captured market has been higher than that of its potential market*. And the gap between the median HHI in the brand’s captured and potential markets seems to have widened even further in 2022-2023.
Driving traffic from affluent consumers appears to be an intentional strategy by the brand. Nike CEO John Donahoe recently noted that the brand is expanding in products across price points and now offers more expensive womenswear than ever before – and location intelligence indicates that this strategy is working. By Q4 2023, the median HHI of Nike’s captured market had climbed to $95.6K – the highest in nearly five years. This suggests that despite the adverse impact of inflation on some aspirational shoppers, Nike is succeeding in driving high-value foot traffic.
*A chain’s potential market refers to the population residing in a given trade area, where the Census Block Groups (CBGs) making up the trade area are weighted to reflect the number of households in each CBG. A chain’s captured market weighs each CBG according to the actual number of visits originating to the chain from that CBG.
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Will the success of upscale athleisure and sportswear continue in 2024? Visit Placer.ai to find out.
This blog includes data from Placer.ai Data Version 2.0, which implements improvements to our extrapolation capabilities, adds short visit monitoring, and enhances visit detection.
The big news coming out of Dollar Tree’s Q4 2023 update was that the company plans to close 1,000 stores following a comprehensive portfolio review (which we first discussed in December). Management plans to close approximately 600 Family Dollar stores in the first half of fiscal 2024, with another 370 Family Dollar and 30 Dollar Tree stores expected to close over the next several years as store lease terms expire. The 970 anticipated Family Dollar store closures represent 11.6% of the banner’s 8,359 stores opened as of the end of February. Dollar stores were one of the strongest performing categories from a visitation (new stores and perspective during 2023 (below), so it may seem surprising that Dollar Tree plans to close so many Family Dollar stores during 2024.
Dollar Tree’s decision to close Family Dollar stores echoes a lot of what we’ve heard from other retailers closing stores in recent years, including Macy’s, CVS/Walgreens, and others. For the most part, retailers’ decisions to close stores comes down to a combination of factors: (1) population migration has changed the supply/demand balance in a given market; (2) consumer behavior has changed post-COVID; (3) the retailer is facing new sources of competition and eroding consumer loyalty; and (4) retailers are replacing underperforming stores with a modernized store layout.
Management cited changing demographics and market saturation as key considerations driving its consolidation efforts for Family Dollar. While the company has not announced which locations it plans to close, we’ve plotted Family Dollar’s 1,000 lowest performing locations over the trailing twelve months on a visit per square foot basis below.
If we compare this to a map of changes in Origin/Destination Household Income Ratio over the past four years (using Placer’s Migration Trends report), the changing demographics that Dollar Tree cited becomes evident. Many underperforming Family Dollar locations are in the Mid-Atlantic and Southeast markets, several of which have seen an increase in higher household income population due to migration (represented by the green dots below). As populations in these markets have shifted, it’s not surprising that the company is reevaluating its store portfolio in these markets.
The other factor at play behind these store closures is increasing competition. We’ve discussed disruption from Temu and other online marketplaces in the past, but dollar stores are also fighting for visitor share with value grocery chains, superstores, and convenience stores. And it’s not just lower-income consumers that these chains are fighting over–we’re seeing increasing evidence that dollar stores are seeing visits from middle income consumers. In fact, Dollar Tree CEO Rick Dreiling noted that Dollar Tree added 3.4 million new customers in 2023, mostly from households earning over $125,000 a year. We’ve previously noted how Walmart has been successful attracting more middle-income consumers but if we look at captured trade area demographics for the Dollar Tree banner (and not including Family Dollar) from Q3 2023 to Q4 2023, we do see an increase in the trade areas between $50-$150K in household income (below).
Admittedly, some of the increase in higher-income consumers can be explained by the aforementioned migration trends, but management also attributes the pick up in middle-income consumers to its multi-price point strategy called “More Choices” (which we’ve discussed in the past). In particular, we believe the company has seen success driving visits to Dollar Tree stores with its $3, $4, and $5 frozen and refrigerated assortment, which have been rolled out to more than 6,500 locations today (almost 80% of the banner’s store base as of February). The company has also discussed adding cooler capacity at Family Dollar stores; 17,000 cooler doors were added at Family Dollar last year, which brought the average to 26 coolers per store (versus a long-term goal of 30 coolers per store). We suspect that many of the closed Family Dollar stores will be replaced with new stores featuring expanded cooler offerings to better compete for customers across all demographic groups.
There are also more practical reasons for the store closures, including improved execution. Dreiling pointed out that underperforming stores can “take the bulk of a district manager's time”. By closing them, the company can better focus on service and execution at existing stores. Also, management believes that the closings will be accretive from a cash perspective (i.e., it’s cheaper to run these underperforming stores dark than it is to operate them at a loss).
When closing stores, there is always the risk that customers will churn to competing retail brands and categories. In fact, we’ve seen a meaningful number of visitors to CVS and Walgreens locations that closed the past two years migrate to nearby grocery and superstore chains. However, by replicating many of Dollar Tree’s successful strategies–including expanded cooler assortments–at future Family Dollar store openings, it gives the chain an opportunity to offset potential visitors lost to this round of closures.
While many retailers have embraced smaller format stores, one chain bucking this trend is Dick’s Sporting Goods through its large-format House of Sport concept. This format offers shoppers an “elevated assortment and service model, premium experiences and enhanced visual expressions”. We discussed the early success of the House of Sport last summer, and with a few months of additional data to look at, we can now better assess the longer-term potential of this concept sporting goods retail category.
Below, we’ve presented visit per location data for the 12 Dick’s House of Sport locations currently open versus Dick’s chainwide average since the beginning of 2023. The strong visits per location trends that we identified last July continued into the back half of 2023 and early 2024, with House of Sport locations now seeing 5-6 times the number of visits per location compared to the rest of the chain. For reference, the average Dick’s Sporting Goods store is roughly 50K square feet square feet compared to 100K-120K square feet for House of Sport, indicating that House of Sport is also outperforming on a visit per square foot basis.
Given the strong visitation trends, it’s not surprising that Dick’s plans to invest more in the House of Sport concept in the years ahead. In 2024, the company plans to open eight new locations, with seven being planned relocations/conversions of existing Dick’s stores and one new store at Prudential Center in Boston. The company also plans to begin construction this year on approximately 15 House of Sport locations that will open throughout 2025, bringing the total number of House of Sport locations to 35 by the end of 2025. Longer-term, management sees an opportunity for 75-100 House of Sport locations by 2027.
Interestingly, Dick’s plans to incorporate experiential elements similar to House of Sport across the rest of its store portfolio. During its Q4 2023 update this past week, management also announced plans to open 16 next-generation 50K square foot Dick’s Sporting Goods stores in 2024, including the relocation/remodeling of 12 existing stores (on top of the 11 next-generation stores already opened). These next generation stores were inspired by the House of Sport format and incorporate expanded product assortments for certain categories, emphasis on services, and improved visuals. The company also plans to open 10 Golf Galaxy Performance Center locations in 2024 (aligning well with golf’s post-COVID comeback).
In total, Dick’s Sporting Goods plans to increase square footage by approximately 2% in 2024, marking the retailer's largest annual square footage increase since 2017. Importantly, the economics behind Dick’s nascent store formats are compelling. The House of Sport formats generate approximately $35 million in omnichannel sales per store, approximately 20% EBITDA margins, and cash-on-cash returns of 35% on an initial investment of $18.5M ($11.5M capex, $3.5M inventory, and $3.5M pre-opening costs). The next-generation Dick’s stores are expected to generate $14M in omnichannel sales per store, 20% EBITDA margins, and cash-on-cash returns of 65% on an initial investment of $4.5M ($2.5M capex, $1.5M inventory, and $0.5M in pre-opening costs).
Meow Wolf’s Omega Mart in Las Vegas is an immersive entertainment experience that is sui generis and requires an in-person visit to truly understand this one-of-a-kind adventure. It’s a bit like an escape room, a bit of a psychedelic art show, with tongue-in-cheek humor and a satiric take on our consumerist tendencies. Make sure to keep an open mind when you visit and don’t be afraid to touch and feel the objects. In addition to Las Vegas, there are also locations in Denver “Convergence Station”, Grapevine “The Real Unreal”, and Santa Fe “House of Eternal Return”, with Houston opening in 2024.
When we look at participants from Las Vegas, Denver, and Grapevine, per Spatial.ai Followgraph, they have a higher propensity for being enthusiasts about Artificial Intelligence, Robotics, Electric Vehicles, Celebrity Entrepreneurs, Mental Health Advocates, and Athleisure. They are more likely than average to Chase Credit Card Rewards, Invest in Real Estate, eat Mexican Food, and Love BBQ.
The segments they come from are varied, per Spatial.ai PersonaLive. Las Vegas tends to attract the most Near-Urban Diverse Families, followed by Young Professionals. Nearly 1 in 5 at the Denver location are Young Professionals, as are 14.1% in Grapevine.
Those visiting the Denver location stay the longest, with a median dwell time of 120 minutes. Santa Fe is next at 109 minutes.
As the experience economy evolves, the options for fun continue to grow. Here at the Anchor, we’ve delved into eatertainment, bowling, rock climbing, pickleball, mini-golf, driving ranges, and more. Enter Axe Throwing. It’s the type of activity you’ll often see on some of those reality dating shows, but upon closer inspection, it’s also come into a league of its own, and with technology allowing one to project targets onto the cork board, the ante is upped with a variety of games available. The International Axe Throwing Federation has over 20,000 members in 9 countries, pointing to the popularity of this sport worldwide. Here in the US, two large chains include Bad Axe Throwing and Bury the Hatchet.
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.
