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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.
Of all the predictions about what would be the prevailing retail trends in 2024, an uncharacteristic cold snap wasn’t on anyone’s radar. But so far this year, extreme weather has had a major impact on consumer behavior in a host of retail categories. How big an influence have drastic conditions had on foot traffic and what visit patterns are emerging as temperatures thaw? We dove into the latest location analytics to find out.
A powerful Arctic blast gripped a large portion of the continental U.S. in January 2024. And along with other disastrous consequences, the chill caused many consumers to stay indoors – resulting in a decline in overall retail visits.
Although retail foot traffic the week of January 8th, 2024 was almost in line with 2023 levels – likely due to a flux of consumers stocking up on essentials – the week of January 15th saw the overall retail visits gap widen to 2.9% year-over-year (YoY) as the storm expanded its grip on the country.
The worst of the cold abated in late January 2024, and consumers appeared to be out and about again – catching up on errands and making up for time spent cooped up at home. Overall retail visits picked up steam the week of January 22nd, 2024 and sustained positive YoY growth through February.
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Zooming in on retail foot traffic by state revealed the scope of the storm’s impact on visits nationwide. Generally, states that bore the brunt of the cold blast saw the widest YoY retail visits gaps. And although perennial cold weather regions were not spared from the unusual cold spell, consumers in the often frigid Upper Midwest and Northeast may have been more acclimated to the cold and therefore able to maintain somewhat normal shopping routines.
In January 2024, Montana, Wyoming, the Dakotas, and Minnesota – along with Maine, Vermont, and New Hampshire – all experienced YoY retail visit growth, despite the extreme weather. Meanwhile, foot traffic in much of the Midwest and South buckled under the abnormal conditions.
The resilience of the Upper Midwest and the Northeast was evident again as temperatures thawed. While winter weather was still prevalent in these parts, North Dakota, Minnesota, Wisconsin, Maine, and Vermont all cozied up to over 8.0% YoY retail visit growth in February 2024.
As was the case for retail foot traffic patterns as a whole, the cold snap took a toll on visits to the dining space early on in 2024. The data suggests that many consumers stayed home and cut back on dining out during the extreme storm. But as temperatures more or less normalized, restaurant-goers were eager to get back to their favorite dining hot spots.
Analysis of weekly foot traffic to the various dining categories in January and February 2024 once again showcased the industry’s resilience and the strength of discretionary spending as a whole.
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Diving into dining foot traffic on the state level provided further evidence that freezing conditions likely influenced the eating-out behavior of consumers.
Location analytics revealed that as storms raged in January 2024, southern and midwestern states – where consumers may have been caught off guard by the extreme weather – experienced the widest YoY dining visit gaps. Meanwhile, upper midwestern and northeastern states – where consumers are generally accustomed to harsher winters – produced dining traffic growth.
In February 2024 – as temperatures warmed – several states in the Upper Midwest and Northeast mustered exceptional increases in YoY dining visits. But notably, all of the continental U.S. saw YoY dining traffic growth during that month – further indication of the dining space’s ability to bounce back from adversity and the sustained demand for going out.
Which retail trends will prevail as 2024 progresses? 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.
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.
