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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.
The first American mall opened in 1956 and reinvented retail – within a decade there were over 4,500 malls across the country. But a rise in e-commerce coupled with the oversaturation of mall options across the country paved the way for mall visits to slow, and many predicted that malls would go the way of the dinosaur.
But although malls were hit hard over the past few years as lockdowns and rising costs contributed to a significant drop in foot traffic, shopping centers have proven resilient. Leading players in the space have consistently reinvented themselves and explored alternate ways to draw in crowds – and as inflation cools, malls are bouncing back as well.
This white paper analyzes the Placer.ai Shopping Center Industry – a collection of over 3000 shopping centers across the United States – as well as the Placer.ai’s Mall Indexes, which focus on top-tier Indoor Malls, Open-Air Shopping Centers, Outlet Malls. The report examines how visits are shifting and where behaviors are changing – and where they’re staying the same – and takes a closer look at the strategies malls are using to attract shoppers in 2024.
Malls experienced a rocky few years as pandemic-related restrictions and economic headwinds kept many shoppers at home, and visits to all mall types in 2021 were between 10.7% to 15.3% lower than in 2019. But foot traffic trends improved significantly in 2022 – likely due to the fading out of COVID restrictions.
By 2023, visits to the wider Shopping Center Industry were just 2.3% lower than they had been in 2019, and the visit gaps for Indoor Malls and Open-Air Shopping Centers had narrowed to 5.8% and 1.0% lower, respectively. Outlet Malls also saw visits ticking up once again, with the visit gap compared to 2019 narrowing to 8.5% in 2023 after having dropped to 11.3% in 2022. This more sustained foot traffic dip may stem from consumers’ desire to save on gas costs or the impacts of inclement weather. However, the narrowing visit gaps suggest that shoppers are increasingly returning to the segment, and foot traffic may yet pick up again in 2024.
COVID-19 impacted more than just visit numbers – it also changed in-store consumer behavior. And now, with the Coronavirus a distant memory for many, some of these pandemic-acquired habits are fading away, while other shifts appear to be holding steady.
One visit metric that appears to have reverted to pre-COVID norms is the share of weekday vs. weekend visits. Weekday visits had increased in 2021 – at the height of COVID – as consumers found themselves with more free time midweek, but the balance of weekday vs. weekend visits has now returned to 2019 levels.
In 2023, the Shopping Center Industry, which includes a number of grocery-anchored centers along with open-air shopping centers and their relatively large variety of dining options, saw the largest share of weekday visits, followed by Indoor Malls. Outlet Malls received the lowest share of weekday visits – around 55% – likely due to the longer distances usually required to drive to these malls, making them ideal destinations for weekend day trips.
While the day of the week that people frequent malls hasn't changed significantly since 2019, there is one notable difference in mall foot traffic pre- and post-pandemic. Almost all mall categories are seeing fewer during the late morning-midday and late evening dayparts, while the amount of people heading to a mall in the afternoon and early evening has increased.
In 2019, Indoor Malls saw 20.1% of visits occurring between 10:00am and 1:00pm, but that share decreased to 18.6% in 2023. Meanwhile, the share of visits between 4:00-7:00 pm rose from 29.1% in 2019 to 32.4% in 2023. Similar patterns repeated across all shopping center categories, with the 1:00-4:00pm daypart seeing a slight increase, the 4:00-7:00 pm daypart receiving the largest boost and the 7:00-10:00 pm daypart seeing the largest drop. So although changes in work habits have not altered the weekly visit distribution, it seems like hybrid workers are taking advantage of their new, and likely more flexible schedules to frequent malls in the afternoon instead of reserving their mall trips for after work. The significant numbers of Americans moving to the suburbs in recent years may also be contributing to the decline of late night visits, with these suburban newcomers perhaps less likely to spend time outside the house during the evening hours.
Although malls have enjoyed consistent growth in foot traffic over the past two years, visits still remain below 2019 levels. How can shopping centers attract more shoppers and recover their pre-COVID foot traffic?
Some malls are attracting visitors by looking beyond traditional retail with offerings such as gyms, amusement parks, and even entertainment complexes. And with more traditional mall anchors shutting their doors than ever, even smaller shopping centers are adding lifestyle experiences options in newly vacant spaces – and incorporating unique elements into traditional retail spaces.
In September 2023, the Chandler Fashion Center in Arizona opened a giant SCHEELS store in its mall. The 250,000-square-foot sporting goods store boasts more than just sneakers – visitors can ride on a 45-foot Ferris Wheel or marvel at a 16,000-gallon saltwater aquarium. And monthly visitation data to the mall reveals the power of this new retail destination, with foot traffic to the mall experiencing a major jump from October 2023 onward. The excitement of the new SCHEELS seems to be sustaining itself, with February 2024 visits 23.3% higher than the same period of 2023.
Restaurants, too, can help bring people into malls. The Southgate Mall in Missoula, Montana, experienced a jump in monthly visits following the opening of a Texas Roadhouse steakhouse in November 2023. Customers seem to be receptive to this new addition – the mall saw a sustained increase in foot traffic from November 2023 onward, with year-over-year (YoY) visit growth of 17.0% in February 2024.
The addition of Texas Roadhouse provides Missoula residents with a family-friendly dining experience while tapping into the evergreen popularity of steakhouses.
Malls that don’t want to choose between adding a dining option and incorporating a novel entertainment venue can blend the two and go the “eatertainment” route. One shopping center – North Carolina’s Cross Creek Mall – is proving just how effective these concepts can be for a mall looking to grow its foot traffic.
Eatertainment destination Main Event opened at the mall in August 2023, bringing laser tag, video games, virtual reality, and 18 bowling lanes with it. Main Event’s opening also provided a boost in foot traffic to the mall – monthly visits to Cross Creek Mall surged following the opening. And this foot traffic boost sustained itself, particularly into the colder winter months – January and February 2024 saw YoY growth of 12.3% and 25.1%, respectively.
Integrating entertainment options at malls is one strategy for driving visits, but there are plenty of other ways to bring people through the doors. Pop-ups have been a particularly popular option of late, especially as more online brands venture into the world of physical retail. And malls, which typically tend to leave a small portion of their storefronts vacant, can be the perfect place to host a retailer for a limited time.
One brand – Shein – has been a leader in the pop-up space, bringing its affordable fashion to malls in Las Vegas, Seattle, and Indianapolis. These short-term residencies – typically no longer than three to four days – allow shoppers to try the popular online retailer’s products before they buy.
Shein has enjoyed success with its mall residencies, evidenced by the foot traffic at the Woodfield Mall in Illinois, which hosted a three-day pop-up from December 15-17, 2023. The retail event was hugely popular, with visits reaching Super Saturday (the last weekend before Christmas) proportions – even though this year’s Super Saturday coincided with Christmas Eve Eve (December 23rd) and drove unusually high traffic spikes.
Shein pop-ups are typically very short – no more than three to four days. This format, known for creating a sense of urgency among shoppers, has proven powerful in driving store visits. But can longer-lasting pop-ups find success as well?
Foot traffic data from pop-ups hosted by Swedish home furnisher IKEA suggests that yes – longer-term residencies can be successful. The chain is working on growing its presence across the country, particularly in malls. To that end, IKEA has been experimenting with mall pop-ups, beginning with a six-month residency at the Rosedale Center in Roseville, Minnesota.
IKEA opened its store on February 16, 2024, and visits to the mall increased significantly immediately after. The first week of the pop-up saw a 12.9% growth in visits compared to a January 1-7, 2024 baseline. And by the third week of the pop-up, there were still noticeably more people frequenting the mall than before the launch.
The luxury retail segment has had a great few years, and malls are tapping into this popularity. Nearly 40% of new high-end store openings in 2023 were in mall settings, many in Sunbelt states like Texas, Florida, and Arizona, perhaps driven in part by demand from an influx of wealthy newcomers to those states.
A comparison of upscale shopping malls to standard shopping centers across Sunbelt States reveals just how popular high-end retail is in the region. Malls with a high percentage of luxury and designer stores like the Lenox Square Mall in Georgia or the NorthPark Center in Texas saw considerably more YoY visit growth than the average visit growth for shopping centers in their respective states.
Lenox Square Mall saw foot traffic increase 31.2% YoY in 2023, while shopping centers in Georgia saw their visits grow by just 2.7% YoY in the same period. Similar trends repeated in Louisiana, Arizona, California, and Florida. And while some of this growth may be due to the resilience of these wealthier shoppers in the face of inflation, one thing is clear – luxury is here to stay.
Malls are thriving, carving out spaces for themselves in a competitive retail environment. By prioritizing experiential retail, entertainment, pop-up shops, and luxury offerings, shopping centers across the country are remaining relevant in a rapidly changing retail world. And mall operators that recognize the power of innovation and evolve along with their customers can hope to meet with continued success.
Consumer preferences have shifted over the past five years. COVID-19 and inflation impacted shopping habits and behaviors across the retail space – and while some of the changes were short-lived, others appear to have more staying power. Now, with memories of the lockdowns fading, and as the inflation that plagued much of 2022 and 2023 wanes (hopefully), we analyzed location intelligence data to understand what the retail and dining landscape looks like today.
This report leverages historical and current foot traffic data and trade area analysis to better understand the current retail and dining landscape and reveal consumer trends likely to shape 2024 and beyond. Which segments have benefited most from the shifts of the past five years? How are legacy brands staying on top of current shopping and dining trends? Where are people shopping and dining in 2024? And what characterizes the modern consumer?
One of the major retail stories of the past five years has been the rise of Discount & Dollar Stores. Category leaders such as Dollar General and Dollar Tree expanded significantly prior to the pandemic, which helped these essential retailers attract large numbers of customers during the initial months of lockdowns.
During this period, many Discount & Dollar Stores invested in more than just their store count – several leading chains also expanded their grocery selection, allowing these companies to compete more directly for Grocery and Superstore shoppers. As Discount & Dollar Stores continued growing their store fleets – and as the pandemic gave way to inflation concerns – shoppers looking for more affordable consumables options gravitated to this segment.
Location intelligence shows that the rapidly opening stores and stocking them with fresh groceries is working – since 2019, Discount & Dollar Stores have slowly but steadily grown their visit share relative to the Grocery and Superstore sectors.
In 2019, Discount & Dollar retailers captured 15.1% of the visit share between the three categories analyzed. This number grew by a full percentage point between 2019 and 2020 and the trend has continued, with the category enjoying 16.6% of the relative visit share in 2023. Meanwhile, Superstores’ relative visit share decreased during the same period, dropping from 41.7% in 2019 to 40.0% in 2023, while the relative visit share of Grocery Stores remained mostly stable.
Still, consumers are not giving up their regular Grocery or Superstore run quite yet – over 80% of combined visits to Grocery Stores, Superstore, and Discount & Dollar Store sectors still go to Grocery Stores and Superstores. But the data does indicate that some shoppers are likely choosing to shop for groceries and other consumables at Discount & Dollar Stores. And CPG companies and category managers looking to reach customers where they shop may want to consider adding Discount & Dollar Stores to their distribution channels.
The key question that remains is how much of the gained visit share can the Discount & Dollar leaders maintain as the economic environment improves. This metric will be the strongest sign of whether the short term gains made within a favorable context drove long term value.
Superstores’ visit share may be shrinking somewhat in the face of Discount & Dollar Stores’ growth. But diving into the Superstore leaders reveals that these macro-shifts are having a different impact on the various sub-categories within the wider Superstore segment.
Walmart remains the undisputed Superstore leader thanks to its 61.8% share of overall visits to Walmart, Target, Costco, Sam’s Club, and BJ’s in 2023. But 61.8% is still lower than the 66.3% relative visits share that the Superstore behemoth enjoyed in 2019. Meanwhile, Target grew its relative visit share from 17.3% in 2019 to 19.3% in 2023, while the combined visit share of the three membership club brands increased from 16.5% in 2019 to 18.9% in the same period.
Some of the shift in visit share can be attributed to Walmart closing several locations while Target, Costco Sam's Club, and BJ's expanded their fleet – but other factors are likely at play.
Costco and Target attract the most affluent clientele of the five chains analyzed, which could explain why these chains have seen significant growth at a time when many consumers are operating with tighter budgets. The success of these companies also suggests that there are enough consumers willing to spend beyond the basics – as shown with Target’s Stanley Cup success (more on that below) – to support a varied product selection that includes higher-priced options. It also speaks to a high upside on a per customer basis for chains that have proven effective at providing higher-end products alongside those with a value orientation. This speaks to a unique capacity to effectively address “the middle” – an audience that is defined neither solely by value-seeking nor by high-end product proclivities.
Sam's Club and BJ’s also give shoppers an opportunity to save by buying in bulk and cutting down on shopping trips – and related gas expenses – which may also have contributed to their success. The increase in the relative visit share of wholesale clubs indicates that today’s consumer might react positively to more options for bulk purchases in non-warehouse club chains as well.
Retail is not the only sector that has seen slow and steady shifts in recent years – the dining space was also significantly impacted by pandemic restrictions of 2020-2021 and the inflation of 2022-2023. Location intelligence reveals shifts in both the types of establishments favored by consumers and in the in-store behaviors of dining consumers.
Convenience stores’ dining options have evolved in recent years, with today’s consumers heading to Wawa for a freshly made specialty hoagie or to Buc-ee’s to enjoy the chain’s variety of specialty snacks.
Analyzing the visit distribution among C-Stores and other discretionary dining categories (Fast Food and QSR, Restaurants, and Breakfast & Coffee, not including Grocery and Superstores) showcases the growing role of C-Stores in the dining space. Between 2019 and 2023, C-stores' visit share relative to the other discretionary dining categories jumped from 24.2% to 27.1%. The relative visit share of Breakfast, Coffee, Bakeries & Dessert Shops also grew slightly during the period. Meanwhile, Restaurants’ relative visit share dropped from 13.8% to 11.7% and Fast Food & QSR’s dipped from 51.8% to 50.6%.
Several factors are likely driving this evolution. Most Restaurants shuttered temporarily at the height of the pandemic while C-Stores remained open – and consumers likely took the opportunity to get acquainted with C-Stores’ food-away-from-home options. And many C-Stores expanded their footprint in recent years, while some dining chains downsized, which likely also contributed to the changes in relative visit share between the segments.
But the continued growth of C-Stores between 2021 and 2022, and again between 2022 and 2023, indicates that many diners are now embracing C-Store food out of choice and not just due to necessity. The rise of the Breakfast, Coffee, Bakeries & Dessert Shops category alongside C-Stores in the past five years may also highlight the current appetite for affordable grab-and-go food options. And with C-Store operators embracing the shifts brought on by the pandemic and actively expanding their food options, diners are increasingly likely to consider C-Stores for their portable meals and packaged snacks.
C-Store visitors are increasingly receptive to trying new products at their local c-store. So how can C-Store operators and CPG companies determine which products will best appeal to customers? Analyzing the trade areas of seven major chains – 7-Eleven, Wawa, Casey’s, QuikTrip, Cumberland Farms, Plaid Pantry, and Buc-ee’s – using the Spatial.ai: FollowGraph dataset reveals significant variance in food preferences between the chains’ visitor bases.
For instance, Plaid Pantry visitors were 55% more likely than the nationwide average to fall into the “Asian Food Enthusiasts” segment in 2023, in contrast with Casey’s visitors who are 7% less likely to belong to this psychographic. Residents of the trade areas of QuikTrip and Buc-ee’s rank highest for "Fried Chicken Lovers," while Cumberland Farms and Plaid Pantry visitors register the least interest. C-Store operators, QSR franchisees, packaged food manufacturers, and other stakeholders can leverage these insights to optimize food offerings, identify promising partnership opportunities, and find new venues for product testing.
While C-Stores stores may be the exciting story of the day, Full-Service Restaurants continue to play a major role in the wider dining landscape. And despite the ongoing economic headwinds, several dining brands and categories are seeing growth – although location intelligence suggests that in-restaurant behavior may be changing as well.
For example, the hourly visits distribution for leading steakhouse chains has shifted over the past five years: Between 2019 and 2023, Texas Roadhouse, LongHorn Steakhouse, and Outback Steakhouse all saw a jump in the share of visits occurring between 2:00 PM and 6:00 PM – not typical steak eating hours.
Outback and Texas Roadhouse offer early bird dinner specials while LongHorn has a happy hour, so some diners may be choosing to visit these restaurant chains earlier in the evening in order to stretch their eating out budget. Other consumers who are still working from home most of the week may also be eating on a more flexible schedule, and these diners may be having more late lunches in 2023 when compared to 2019. Restaurant operators, drink providers, and menu developers may want to adapt their offerings to this emerging mid-afternoon rush.
The data examined above shows changes within key retail and dining segments over the past five years. So what do these shifts reveal about today’s consumer? What are shoppers and diners looking for in 2024?
The beginning of 2024 was marked by an Arctic blast and plunging temperatures. Consumers, unsurprisingly, hunkered down at home – and foot traffic to many retail categories took a dip. But the declines were short-lived, and by the fourth week of January 2024 foot traffic had rebounded across major categories.
Still, zooming into weekly visit performance for key retail and dining categories for the first eight weeks of the year reveals that the cold did not impact all segments equally – and the subsequent resurgence boosted some sectors more than others.
Discount & Dollar Stores had the strongest start to 2024, with YoY visits up almost every week since the start of the year, and the category showing even more substantial growth once the cold spell subsided. The Grocery category also succeeded in exceeding 2023 weekly visit levels almost every week, although its visit increases were more subdued than those in the Discount & Dollar Store segment.
Superstore and C-Store experienced relatively muted YoY declines in early January and saw significant weekly visit growth as Q1 progressed, with C-Stores outperforming Superstores by late January 2024. And Dining – which suffered a particularly heavy blow in early 2024 – also rebounded with gusto, offering another strong indicator of the resilience of today’s consumer.
Like in the wider Dining industry, weekly YoY visits to the QSR segment quickly rebounded following the unusual cold of the first three weeks of January 2024. And three chains from across the QSR spectrum – legacy chain Wingstop, rapidly expanding Raising Cane’s, and regional cult favorite Whataburger – are seeing particularly strong foot traffic performances.
Diving deeper into the location intelligence reveals that the three chains’ success may be due in part to their visitor base composition: The trade areas of all three brands included a larger share of four-person households compared to the nationwide average of 24.6%.
Wingstop, Raising Cane’s, and Whataburger’s menus all include larger orders to create shareable meals. And larger households seem to be particularly receptive to dining options that allow them to save money, which could explain the significant share of 4+ person households that visit these chains.
The success of these diverse QSR chains also indicates that, although larger households may have more expenses – and might therefore be more impacted by inflation – they can also drive visits to brands that cater to their needs. So dining operators and food manufacturers looking to attract family demographics may consider offering larger meal combos or larger packaging to help larger households splurge on affordable luxuries without breaking the bank.
Perhaps the most significant sign that today’s consumers are still willing to spend money on non-essentials is the recent success of the Starbucks X Stanley “Pink Cup”. The cup has caused such a sensation that re-sellers ask for up to six times the original $50 price – and for those unwilling to shell out the big bucks on the cup, enterprising cup owners offer photo shoots with the product for $5.
The Starbucks X Stanley “Pink Cup” was released on January 3rd, 2024 and could only be bought at Starbucks kiosks located inside a Target. Viral videos of the release circulated on social media, showing eager crowds lining up early in the morning for the chance to be first to grab their cup. Location intelligence reveals that these early morning visits were significant enough to change Target’s typical hourly visit pattern.
Foot traffic between 7:00 AM and 9:00 AM on January 3rd, 2024 accounted for 4.4% of daily visits, compared to 2.6% of daily visits occurring during that time slot on a typical Wednesday in January or February. And demand for the pink Stanley cup drove a spike in daily visits as well – overall daily visits to Target on January 3rd were 18.7% higher than the average Wednesday visits in January and February 2024.
The visit trends to Target on Pink Cup Day are particularly impressive given the freezing weather in some regions of the country and because consumers were coming off the holiday shopping season. And the success of the cup shows that 2024’s shopper is willing to show up – especially for a viral product. Creating buzzy marketing campaigns, then, may be the key to driving retail success.
The retail changes of the past few years have left their mark on how people shop, eat, and spend. And keeping ahead of these changes allows companies and product managers to ensure they can tailor their offerings – whether product selection or marketing campaigns – to the right audience.
The Placer.ai Nationwide Office Building Index: The office building index analyzes foot traffic data from some 1,000 office buildings across the country. It only includes commercial office buildings, and commercial office buildings with retail offerings on the first floor (like an office building that might include a national coffee chain on the ground floor). It does NOT include mixed-use buildings that are both residential and commercial.
This white paper 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 remote work war is far from over – and as the labor market cools, companies are ramping up efforts to get workers back in the office. But even those employers that are cracking down on WFH aren’t generally insisting that employees come in five days a week – for the most part.
Indeed, a growing consensus seems to posit that though in-person work carries important benefits, plugging in remotely at least part of the time also has its upsides. Nixing the daily commute can put the ever-elusive work/life balance within reach. And there’s evidence to suggest that remote work can enhance productivity – limiting distractions and letting workers lean into their individual biological clocks (so-called “chronoworking”).
But the precise contours of the new hybrid status-quo are still a work in progress. And to keep up, relevant stakeholders – from employers and workers to municipalities and local businesses – need to keep their fingers on the pulse of how this fast-changing reality is evolving on the ground.
This white paper dives into the data to explore some of the key trends shaping the office recovery. The analysis is based on Placer.ai’s Nationwide Office Index, which examines foot traffic data from more than 1,000 office buildings across the country. What was the trajectory of the post-COVID office recovery in 2023? What impact did return-to-office (RTO) mandates have on major cities nationwide, including New York, Dallas, San Francisco, and others? And how has the demographic and psychographic profile of office-goers changed since the pandemic?
Analyzing office building foot traffic over the past several years suggests that the office recovery story is still very much being written. After plummeting during COVID, nationwide office visits began a slow but steady upward climb in 2021, reaching about 70.0% of January 2019 levels in August 2023.
Since then, the recovery appears to have stalled – with some observers even proclaiming the death of RTO. But looking back at the office visit trajectory since 2019 shows that the process has been anything but linear, with plenty of jumps, dips, and plateaus along the way. And though office foot traffic tapered somewhat between November 2023 and January 2024, this may be a reflection of holiday work patterns and of January’s unusually cold and stormy weather, rather than of any true reversal of RTO gains. Indeed, if 2024 is anything like last year, office visits may yet experience an additional boost as the year wears on.
TGIF Vibes
But for now, at least, a full return to pre-COVID work norms doesn’t appear to be in the cards. And like in 2022, last year’s hybrid work week gave off some serious TGIF vibes.
On Tuesdays, Wednesdays, and Thursdays, office foot traffic was just 33.2% to 35.3% lower than it was pre-COVID. But on Mondays and Fridays, visits were down a whopping 46.0% and 48.9%, respectively. From a Year-over-year (YoY) perspective too, the middle of the week experienced the most pronounced visit recovery, with Tuesday, Wednesday, and Thursday visits up about 27.0% compared to 2022.
The slower Monday and Friday office recovery may be driven in part by workers seeking to leverage the flexibility of WFH for extended weekend trips. (Indeed, hybrid work even gave rise to a new form of nuptials – the remote-work wedding.) So-called super commuters, many of whom decamped to more remote locales during COVID, may also prefer to concentrate visits mid-week to limit time on the road. And let’s face it – few people would object to easing in and out of the weekend by working in their pajamas. Whatever the motivating factors – and despite employer pushback – the TGIF work week appears poised to remain a fixture of the post-pandemic working world.
Analyzing nationwide office visitation patterns can shed important light on evolving work and commuting norms. But to really understand the dynamics of office recovery, it is crucial to zoom in on local trends. RTO in tech-heavy San Francisco doesn’t look the same as it does in New York’s financial districts. And commutes in Dallas are very different than in Chicago or Washington, D.C.
Overall, foot traffic to buildings in Placer.ai’s Nationwide Office Index was down 36.8% in 2023 compared to 2019 – and up 23.6% compared to 2022. But drilling down into the data for seven major markets shows that each one experienced a very different recovery trajectory.
In New York and Miami, offices drew just 22.5% and 21.9% less visits, respectively, in 2023 than in 2019 – meaning that they recovered nearly 80.0% of their pre-COVID foot traffic. In New York, remote work policy shifts by major employers like Goldman Sachs and JPMorgan appear to have helped set a new tone for the financial sector. And Miami may have benefited from Florida’s early lifting of COVID restrictions in late 2020, as well as from the steady influx of tech companies over the past several years.
San Francisco, for its part, continued to lag behind the other major cities in 2023, with office building foot traffic still 55.1% below 2019 levels. But on a YoY basis, the northern California hub experienced the greatest visit growth of any analyzed city, indicating that San Francisco’s office recovery is still unfolding.
To better understand the relationship between employees’ occupational backgrounds and local office recovery trends, we examined the share of Financial, Insurance, and Real Estate sector workers in the captured markets of different cities’ office buildings. (A POI’s captured market is derived by weighting the census block groups (CBGs) in its True Trade Area according to the share of actual visits from each CBG – thus providing a snapshot of the people that actually visit the POI in practice). We then compared this metric to each city’s year-over-four-year (Yo4Y) office visit gap.
The analysis suggests that the finance sector has indeed been an important driver of office recovery. Generally speaking, cities with greater shares of employees from this sector tended to experience greater office recovery than other urban centers. And for New York City in particular, the dominance of the finance industry may go some way towards explaining the city’s emergence as an RTO leader.
Regional differences notwithstanding, office foot traffic has yet to rebound to pre-COVID levels in any major U.S. market. But counting visits only tells part of the RTO story. Stakeholders seeking to adapt to the new normal also need to understand the evolving characteristics of the in-office crowd. Are office-goers more or less affluent than they were four years ago? And is there a difference in the employee age breakdown?
To explore the evolution of the demographic and psychographic attributes of office-goers since COVID, we analyzed the captured markets of buildings included in the Placer.ai Office Indexes with data from STI (Popstats) and Spatial.ai (PersonaLive). And strikingly, despite stubborn Yo4Y office visit gaps, the profiles of last year’s office visitors largely resembled what they were before COVID – with some marked shifts. This may serve as a further indication that 2023 brought us closer to an emerging new normal.
The median household income (HHI) of the Office Indexes fell during COVID. But by 2022, the median HHI in the trade areas of the Office Indexes was climbing back nationwide in all cities analyzed, and fell just 0.6% short of 2019 levels in 2023. And in some cities, including San Francisco and Dallas, the median HHI of office-goers is higher now than it was pre-pandemic.
Better-paid, and more experienced employees often have more access to remote and hybrid work opportunities – and at the height of the pandemic, it was these workers that disproportionately stayed home. But as COVID receded, many of them came back to the office. Now, even if high-income workers – like many other employees – are coming in less frequently, their share of office visitors has very nearly bounced back to what it was before COVID.
Who are the affluent employees driving the median HHI back up? Foot traffic data suggests that much of the HHI rebound may be fueled by “Educated Urbanites” – a segment defined by Spatial.ai PersonaLive as affluent, educated singles between the ages of 24 and 35 living in urban areas.
For younger employees in particular, fully remote work can come at a significant cost. A lot of learning takes place at the water cooler – and informal interactions with more experienced colleagues can be critical for professional development. Out of sight can also equal out of mind, making it more difficult for younger workers that don’t develop personal bonds with their co-workers and to potentially take other steps to advance their careers.
Analyzing the trade areas of offices across major markets shows that – while parents were somewhat less likely to visit office buildings in 2023 than in 2019 – affluent young professionals are making in-person attendance a priority. Indeed, in 2023, the share of “Educated Urbanites” in offices’ captured markets exceeded pre-COVID levels in most analyzed cities – although the share of this segment still varied between regions, as did the magnitude of the shift over time.
Miami and Dallas, both of which feature relatively small shares of this demographic, saw more dramatic increases relative to their 2019 baselines – but smaller jumps in absolute terms. On the other end of the spectrum lay San Francisco, where the share of “Educated Urbanites” jumped from 47.8% in 2019 to a remarkable 50.0% in 2023. New York office buildings, for their parts, saw the share of this segment rise from 28.8% in 2019 to 31.0% in 2023.
Other segments’ RTO patterns seem a little more mixed. The share of “Ultra Wealthy Families” – a segment consisting of affluent Gen Xers between the ages of 45 and 54 – is still slightly below pre-COVID levels on a nationwide basis. In 2023, this segment made up 13.0% of the Nationwide Office Index’s captured market – down slightly from 13.3% in 2019. In New York and San Francisco, for example – both of which saw the share of “Educated Urbanites” exceed pre-COVID levels last year – the share of “Ultra Wealthy Families” remained lower in 2023 than in 2019. At the same time, some cities’ Office Indexes, such as Miami, Dallas, and Los Angeles, have seen the share of this segment grow Yo4Y.
Workers belonging to this demographic tend to be more established in their careers, and may be less likely to be caring for small children. Well-to-do Gen Xers may also be more likely to be executives, called back to the office to lead by example. But employees belonging to this segment may consider the return to in-person work to be a choice rather than a necessity, which could explain this cohort’s more varied pace of RTO.
COVID supercharged the WFH revolution, upending traditional commuting patterns and offering employees and companies alike a taste of the advantages of a more flexible approach to work. But as employers and workers seek to negotiate the right balance between at-home and in-person work, the office landscape remains very much in flux. And by keeping abreast of nationwide and regional foot traffic trends – as well as the shifting demographic and psychographic characteristics of today’s office-goers – stakeholders can adapt to this fast-changing reality.
