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We dove into the latest data for java leaders Starbucks, Dutch Bros., and Dunkin’ – to discover how each brand drove visits in Q2 2024 and explore coffee consumer visit patterns heading into the summer.
Starbucks has been finding foot traffic success this summer with promotions that seem to be resonating with consumers. In May 2024, the chain launched 50% Off Fridays (beginning May 10th), special Monday Deal Drops (beginning May 13th), and limited-time only summer drinks. And in June, Starbucks’ promotions continued with a new Pairings Menu and a round of handcrafted iced beverages.
Since the week of May 6th, 2024, weekly traffic to Starbucks has been consistently elevated YoY – with visits up 2.3% YoY for Q2 2024 as a whole – indicating that Starbucks’ array of summer promotions are shoring up traffic to the chain.
Like Starbucks, Dutch Bros. ushered in the warm season with a special line-up of summer drinks in May 2024. But even before the launch of these seasonal promotions, the coffee powerhouse has been driving visits.
In Q2 2024, Dutch Bros.’ visits increased 15.0% YoY amidst ongoing fleet expansion. And throughout H1 2024, monthly visits-per-location increased YoY nearly across the board – surpassing the wider category average – indicating that Dutch Bros.’ growth is meeting robust demand.
In June 2024, Dutch Bros. saw 5.7% YoY visit-per-location growth, the chain’s largest increase of the year so far. With more planned expansions, an additional promotional drink release in July, and continued steps to advance mobile ordering and its rewards program, Dutch Bros. appears poised to drive growth in the back half of 2024 as well.
Though indisputably a coffee chain, Dunkin’ is still donut-obsessed and celebrates the doughy treat every year on National Donut Day (this year, June 7th). Among its many promotional events this summer, Dunkin’ treated customers to a free donut with the purchase of a beverage on the big day. And the milestone turned out to be Dunkin’s busiest day of the year so far – driving a 28.4% foot traffic increase compared to the daily year-to-date average (January 1st to July 20th, 2024).
Indeed, National Donut Day seems to have kickstarted Dunkin’s busy summer. Following several weeks of flagging YoY visit performance in May – likely attributable in part to the chain’s strong May 2023 performance – Dunkin’ saw a YoY visit boost of 4.5% during the week of June 3rd, 2024. And subsequent weeks have seen a continuation of this positive momentum, as the chain continues to promote its summer fare.
Starbucks, Dutch Bros., and Dunkin’ each do summer in their own way. But one thing all three chains have in common is an increase in evening visits during the summer months.
In Q3 2023, including the peak summer months of July and August, all three chains experienced significant upticks in evening visits (between 6:00 and 11:00 PM). During the winter months – Q4 2023 and Q1 2024 – the share of visits taking place in the evenings dropped for all three chains, before picking up again in Q2 2024.
A variety of factors may be behind this summer shift in coffee consumption. Consumers may be more likely to be out socializing during lazy summer evenings – when students are off and many Americans take vacation. Extended daylight hours in summer may also entice more consumers into an extra caffeine boost later in the day.
If last year’s Q3 evening coffee visit boost is any indication, Starbucks, Dunkin’, and Dutch Bros. may all be in for evening foot traffic increases as the summer wears on.
How will these coffee giants stay hot during the final stretch of summer and will they maintain their momentum going forward?
Visit Placer.ai to find out.
Summer is a time when many consumers are on the go – and vacationers moving between activities look to quick-service restaurants (QSR) and fast-casual chains to fill up and beat the heat.
We checked in with McDonald’s, Wendy’s, Wingstop, and Shake Shack to see how they are performing heading into the summer, and examined location analytics for McDonald’s latest concept – CosMc’s – to uncover emerging visitation trends for the new chain.
Popular wing and burger destinations Wingstop and Shake Shack are thriving this summer, as both chains double down on expansion plans. Shake Shack is on track to add dozens of new locations to its 300+ domestic shacks in 2024, and Wingstop’s hundreds of newly added locations bring its U.S. restaurant count to nearly 2000 venues.
These aggressive expansion strategies are playing a significant role in the chains’ respective visit growth. In June 2024, Wingstop’s visits were up 34.2% YoY, while Shake Shack’s were up 28.1%.
As the chains expand their footprints, both are taking steps to increase store efficiency and improve service. Wingstop recently adopted a new in-house transaction software, while Shack Shack continues to streamline the kiosk ordering experience.
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The experience at many eateries continues to change – as do the prices diners see on their menus. During the first months of 2024, inflation drove price increases across the QSR space. And as consumers took note of the higher prices, “the summer of value wars” got underway – with a long list of chains, including fast-food giants McDonald’s and Wendy’s, introducing low-cost meals and menus to reel in inflation-wary diners.
Despite price hikes felt by consumers, in Q2 2024, McDonald’s visits grew by 0.4% YoY and Wendy’s grew by 1.4%. And the late-June launch of McDonald’s and Wendy’s new limited-time $5 bundles – which are already making their impact felt on the ground – may drive further foot traffic growth for the two chains throughout the summer.
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While many fast-food diners are looking for value this summer, they’re also proving eager to try new culinary experiences. McDonald’s spin-off restaurant CosMc’s landed in late 2023, with throngs of eager diners lining up for a taste of the unique concept. Since the first location opened in Bolingbrook, IL, several new CosMc’s have emerged to heavy fanfare, including one in Watauga, TX and another in Dallas.
And although CosMc’s is still in its infancy, location analytics shows that the concept already drives traffic from more affluent consumers than the traditional McDonald’s chain.
In June 2024, for example, the median household income (HHI) in the captured market of the Bolingbrook, IL CosMc’s was $97.0K – significantly higher than that of McDonald’s in the Chicago metro area ($75.5K) or of McDonald’s nationwide ($65K).
A similar trend could be observed in the Dallas-Ft. Worth-Arlington CBSA – where the captured markets of local CosMc’s featured significantly higher median HHIs than those of McDonald’s.
As a beverage-led concept, CosMc’s may drive more traffic from higher-income consumers than a traditional McDonald’s – where simple soft drinks typically come as an inexpensive meal add-on. And as a result, the chain may help McDonald’s bring a new consumer cohort into the fold.
Summer 2024 is undoubtedly shaping up to be the “Summer of Value” and perhaps the “Summer of Fast Food” as well. Will favorable trends continue in the months ahead?
Visit Placer.ai to find out.
The fast-casual space has been having a moment – with rising QSR prices leading many diners to embrace an upgraded experience. So with Q2 2024 in the rearview mirror, we dove into the data to check in with two fast-casual restaurant chains that have been doing particularly well: Chipotle and sweetgreen. How did their Q2 performance compare to that of the wider fast-casual segment? And what is it, exactly, that they are doing right?
We dove into the data to find out.
In the first quarter of 2024, Chipotle reported a 14.1% YoY increase in total revenue, and a 7.0% increase in comparable restaurant sales. And the chain isn’t showing any signs of slowing down. In Q2 2024, Chipotle saw YoY chain-wide foot traffic growth of 16.9%. And while some of this increase was undoubtedly due to the chain’s continued expansion – Chipotle added some 247 U.S. restaurants over the past year – the average number of visits to each of Chipotle’s restaurants also increased by an impressive 9.5%. By way of comparison, fast-casual restaurants experienced average quarterly YoY visit growth of just 4.2%, and visit-per-location growth of 2.9%.
One factor that appears to be contributing to Chipotle’s remarkable visit growth is its repeat customer base – which is growing more loyal with every passing year. Between Q2 2019 and Q2 2024, the share of visitors frequenting a Chipotle at least twice a month increased from 22.8% to 29.6%, while the share of visitors frequenting a Chipotle at least three times a month grew from 7.9% to 12.1%.
This rise in loyalty has taken place against the backdrop of Chipotle’s growing loyalty program – Chipotle Rewards – which launched in Q1 2019 and today boasts more than 40 million members. The program, which lets members earn points for every dollar spent, offers diners access to personalized deals and a range of special promotions – like free delivery on National Burrito Day. (Before you ask, foot traffic data shows that National Burrito Day, which fell on Thursday, April 4th, 2024 wasn’t just a day for ordering online: It was Chipotle’s busiest Thursday of the year so far, with visits up 19.7% compared to a regular Thursday). This April, Chipotle also partnered with Tekken 8 to offer diners in-game currency in exchange for orders – with special perks for Rewards members.
Another eatery that has been performing remarkably well in 2024 is sweetgreen – the fast-casual restaurant known for its healthy, fresh food. During Q2 2024, visits to sweetgreen were up a remarkable 19.9% YoY, a reflection of the chain’s growing footprint. But foot traffic data shows that there is more than enough demand to sustain sweetgreen’s accelerated expansion – over the analyzed period, the average number of visits to each sweetgreen location also increased by 5.9%.
A look at the hourly distribution of visits to sweetgreen shows that though the chain has made inroads into the dinner daypart, lunchtime remains its prime time to shine – especially on weekdays.
During the first half of 2024, 24.9% of weekday visits to sweetgreen took place between noon and 2:00 PM – compared to just 21.7% for the wider fast-casual category. But while sweetgreen, popular among the in-office crowd, drew a greater share of lunchtime visitors on weekdays, the fast-casual segment as a whole drew a greater share of lunchtime visitors on the weekends. Indeed, on Saturdays and Sundays, the share of lunchtime sweetgreen visitors dropped to 22.7%, while the share of fast-casual lunchtime visitors increased to 22.2%.
Still, suppertime is also a popular daypart for the salad chain on weekdays – with 20.0% of Monday - Friday visits taking place between 6:00 and 8:00 PM. As sweetgreen continues to lean into steaks and other dinner fare, it will be interesting to see if the restaurant begins to capture even more evening traffic.
Chipotle’s and sweetgreen’s strong quarter positions them well for further growth as the year wears on. Will Chipotle’s loyalty continue to increase? And will sweetgreen double down on dinner?
Follow Placer.ai’s data-driven restaurant analyses to find out.
Millennials everywhere, rejoice, because a beloved brand is back, for the next generation. Limited Too, an apparel staple for girls growing up in the 1990’s and 2000’s, has found its way back to the retail stage after years of dormancy. The brand began teasing its return a month ago, but last week brought the announcement that Limited Too’s relaunch will take place via a new apparel line at Kohl’s. With the Fourth of July over and Amazon Prime Day complete, the back-to-school season is officially upon us, even if it still feels like summer. In Kohl’s press release on Friday, the Limited Too introduction is a part of its larger back-to-school efforts, and it appears to be aimed at expanding apparel offerings for girls. And, with Kohl’s recent and upcoming additions like Sephora, Babies”R”Us, and now Limited Too, the target is clearly to woo and excite the Millennial shopper.
The relaunch of Limited Too includes fashion for girls size 7-16, the same Tween demographic that the brand originally captured. Mall-based Limited Too shut its doors in 2008, and the majority of stores were converted into rival retailer, Justice, who shuttered all of its stores in 2020. The brand revival is likely positioned by Kohl’s to appeal to parents who grew up with an affinity for the brand who can now purchase for their children.
With the relaunch, how well situated is Kohl’s to attract this ideal “Limited Too Loyalist”? We took a look at a sampling of former Justice stores prior to closing, from 2018 to January 2020, and compared the audience profile of Justice visitors to Kohl’s visitors using Spatial.ai PersonaLive, both during the same time period as well as in 2024.
Our data highlights that both retailers actually have a similar audience profile of visitors, and that Kohl’s has continued to grow its percentage of Upper Suburban Diverse Families and Wealthy Suburban Families to more closely align with the former Justice demographics. Since the pandemic and through its new partnerships and planned additions, Kohl’s has been able to capture wealthier suburban families, and as Millennials continue to migrate out of urban centers, the retailer may have set itself up well to welcome these shoppers.
The tween apparel market today is highly fragmented, as is true with most areas of discretionary retail, with shoppers having access to countless brands and channels to choose from. Mass merchants, fast fashion, and athleisure brands are all vying for the attention of tweens, who are in turn influencing the retail decisions of their parents. A few months ago, we wrote about Brandy Melville, a somewhat controversial retailer that is still hugely popular with tweens. The retailer has the cool and elusive styling that young shoppers crave, and continues to be a strong traffic performer so far in 2024 (below). We’ve also written about the renaissance of Abercrombie & Fitch, another 2000’s brand with a strong connection to Millennials that has been able to recapture visitors’ attention, and still operates the Abercrombie Kids brand aimed at the same size range as the newly launched Limited Too.
Kohl’s new bet for the back-to-school season hangs on appealing to nostalgic Millennial parents, a group that quickly is becoming a target for many retailer strategies. We wrote last week about the rise of younger visitors to warehouse clubs, and the importance of younger shoppers to growing the member base. In a competitive and value-oriented retail environment, appealing to this group and gaining their loyalty in visits is critical to long-term success. It will be interesting to see if the Millennial love for Limited Too still remains, even after all these years.
Another year, another acquisition for casual-dining restaurant leader Darden Restaurants. Following up last year’s acquisition of Ruth’s Chris Steakhouse, Darden plans to acquire Chuy's for $605M (representing 10.3x Chuy’s trailing-twelve-month adjusted EBITDA of $59, or 8.2x adjusting for run-rate G&A costs that can be eliminated by adding Chuy’s to the Darden portfolio). Chuy’s is among the leading players in the Mexican casual-dining space in terms of revenue ($451M in revenue during 2023, adjusting for the extra week in the reporting calendar), average revenue per unit ($4.5M), and restaurant-level EBITDA (20%).
The acquisition of Chuy’s makes sense to us on a number of levels. First, and most obviously, Chuy’s fills a gap in the Darden portfolio. The company already owns the top player among casual-dining Italian chains (Olive Garden) and the number-two player in casual-dining steakhouses in addition to its other casual-dining (Cheddar’s, Yard House, Bahama Breeze) and fine-dining (Ruth’s Chris, The Capital Grille, Eddie V's, Seasons 52) concepts. By adding a casual-dining Mexican concept to its portfolio, we believe there will be an opportunity to attract incremental visitors. Below, we’ve presented cross visitation for Darden’s casual-dining brands and Chuy’s in 2023, and we see minimal overlap (although the cross-visit data is admittedly impacted by chain size and geography). According to our data, only 4%-5% of visitors to Darden’s existing restaurants also visited a Chuy’s location in 2023 (with the exception of Cheddar’s, which saw a 12.9% cross-visitation percentage).
Second, despite Chuy’s being the leading player in the Mexican casual dining space, it’s still a relatively fragmented category that is ripe for consolidation. Below, we show the share of visitation data for Chuy’s compared to almost 20 other full-service Mexican restaurant chains from 2017-2023. Despite Chuy’s growth, its share of visits relative to the rest of the category has remained relatively healthy in the 12%-15% range. Backed by Darden’s purchasing, advertising, and real estate scale advantages, we see a meaningful opportunity to consolidate share of visits going forward, including visit per location improvement.
Chuy’s has been one of the leaders in the Mexican casual-dining chains in terms of visitation growth this year, outpacing monthly visits for the category by 5% on average (below). While integration will take time, applying guest experience, menu innovation, pricing, and marketing best practices from Darden should help to maintain this leadership.
At 101 company-owned restaurants today, Chuy’s is comparable to several other brands in the Darden portfolio (including Yard House at 88 units and Ruth’s Chris at 79). The chain is well established in Texas (44 company-owned units) but has a relatively small presence in other states across the Southeast and Midwest (below).
As Darden and Chuy’s management pointed out in a conference call to discuss the transaction, there are significant opportunities in both existing and new markets. Placer’s Site Selection tool (which identifies the characteristics of Chuy’s top locations–including trade area populations, demographic fit, cannibalization risk, and competition density–and finds markets/sites with similar characteristics) sees the best fits for expansion in several West, Midwest, and Northeast markets.
The first half of 2024 is proving to be more heavily visited for all types of shopping centers. June in particular is stronger than it was last year. After some January doldrums, where all shopping traffic was lower than the prior year due to weather, February began to pick up and March was particularly strong comparatively for outlet malls compared to last year. April saw a general downtick for more discretionary shopping, but May and June are looking strong so far.
The top 5 outlet malls by traffic during the last week of June were Arundel Mills, Ontario Mills, Sawgrass Mills, Legends Outlets Kansas City, and The Outlets at Orange. Among indoor malls, shoppers flocked to Mall of America, Roosevelt Field, Westfield Valley Fair, Del Amo Fashion Center, and Westfield Southcenter. Weather is always a consideration in the summer months, but as shopping centers have become increasingly sophisticated about strategically placed shade or places to take a break, it can be quite refreshing to visit an open-air lifestyle center. Tops in the nation for traffic include Ala Moana Center, Pier Park, Easton Town Center, Irvine Spectrum Center, and Victoria Gardens. As for high street retail corridors, no one can match the Big Apple. Three of the top five high streets were here, including Times Square and 42nd St at #1, SoHo at #3, and 5th Ave at #4. In second place was Michigan Ave in Chicago and in fifth place was Beverly Hills.
The first quarter of 2024 was generally a good one for retailers. Though unusually cold and stormy weather left its mark on the sector’s January performance, February and March saw steady year-over-year (YoY) weekly visit growth that grew more robust as the quarter wore on.
March ended on a high note, with the week of March 25th – including Easter Sunday – seeing a 6.1% YoY visit boost, driven in part by increased retail activity in the run-up to the holiday. (Last year, Easter fell on April 9th, 2023, so the week of March 25th is being compared to a regular week.)
Though prices remain high and consumer confidence has yet to fully regain its footing, retail’s healthy Q1 showing may be a sign of good things to come in 2024.
Drilling down into the data for leading retail segments demonstrates the continued success of value-priced, essential, and wellness-related categories.
Discount & Dollar Stores led the pack with 11.2% YoY quarterly visit growth, followed by Grocery Stores, Fitness, and Superstores – all of which outperformed Overall Retail. Dining also enjoyed a YoY quarterly visit bump, despite the segment’s largely discretionary nature. And despite the high interest rates continuing to weigh on the housing and home renovation markets, Home Improvement & Furnishings maintained just a minor YoY visit gap.
Discount & Dollar Stores experienced strong YoY visit growth throughout most of Q1 – and as go-to destinations for groceries and other other essential goods, they held their own even during mid-January’s Arctic blast. In the last week of March, shoppers flocked to leading discount chains for everything from chocolate Easter bunnies to basket-making supplies – driving a remarkable 21.5% YoY visit spike.
Dollar General continued to dominate the Discount & Dollar Store space in Q1, with visits to its locations accounting for nearly half of the segment’s quarterly foot traffic (44.7%). Next in line was Dollar Tree, followed by Family Dollar and Five Below. Together, the four chains – all of which experienced positive YoY quarterly visit growth – drew a whopping 91.6% of quarterly visits to the category.
Rain or shine, people have to eat. And like Discount & Dollar Stores, traditional Grocery Stores were relatively busy through January as shoppers braved the storms to stock up on needed items. Momentum continued to build throughout the quarter, culminating in a 10.5% foot traffic increase in the week ending with Easter Sunday.
Like in other categories, it was budget-friendly Grocery banners that took the lead. No-frills Aldi drove a chain-wide 24.4% foot traffic increase in Q1, by expanding its fleet – while also growing the average number of visits per location. Other value-oriented chains, including Trader Joe’s and Food Lion, experienced significant foot traffic increases of their own. And though conventional grocery leaders like H-E-B, Kroger, and Albertsons saw smaller visit bumps, they too outperformed Q1 2023 by meaningful margins.
January is New Year’s resolution season – when people famously pick themselves up off the couch, dust off their trainers, and vow to go to the gym more often. And with wellness still top of mind for many consumers, the Fitness category enjoyed robust YoY visit growth throughout most of Q1 – despite lapping a strong Q1 2023.
Predictably, Fitness’s visit growth slowed during the last week of March, when many Americans likely indulged in Easter treats rather than work out. But given the category’s strength over the past several years, there is every reason to believe it will continue to flourish.
For Fitness chains, too, cost was key to success in Q1 – with value gyms experiencing the biggest visit jumps. EōS Fitness and Crunch Fitness, both of which offer low-cost membership options, saw their Q1 visits skyrocket 28.9% and 22.0% YoY, respectively – helped in part by aggressive expansions. At the same time, premium and mid-range gyms like Life Time and LA Fitness are also finding success – showing that when it comes to Fitness, there’s plenty of room for a variety of models to thrive.
Superstores – including wholesale clubs – are prime destinations for big, planned shopping expeditions – during which customers can load up on a month’s supply of food items or stock up on home goods. And perhaps for this reason, the category felt the impact of January’s inclement weather more than either dollar chains or supermarkets – which are more likely to see shoppers pop in as needed for daily essentials.
But like Grocery Stores and Discount & Dollar Stores, Superstores ended the quarter with an impressive YoY visit spike, likely fueled by Easter holiday shoppers.
As in Q4 2023, membership warehouse chains – Costco Wholesale, BJ’s Wholesale Club, and Sam’s Club – drove much of the Superstore category’s positive visit growth, as shoppers likely engaged in mission-driven shopping in an effort to stretch their budgets. Still, segment mainstays Walmart and Target also enjoyed positive foot traffic growth, with YoY visits up 3.9% and 3.5%, respectively.
Moving into more discretionary territory, Dining experienced a marked January slump, as hunkered-down consumers likely opted for delivery. But the segment rallied in February and March, even though foot traffic dipped slightly during the last week of March, when many families gathered to enjoy home-cooked holiday meals.
Coffee Chains and Fast-Casual Restaurants saw the largest YoY visit increases, followed by QSR – highlighting the enduring power of lower-cost, quick-serve dining options. But Full-Service Restaurants (FSR) also saw a slight segment-wide YoY visit uptick in Q1 – good news for a sector that has yet to bounce back from the one-two punch of COVID and inflation. Within each Dining category, however, some chains experienced outsize visit growth – including favorites like Dutch Bros. Coffee, Slim Chickens, In-N-Out Burger, and Texas Roadhouse.
Since the shelter-in-place days of COVID – when everybody had their sourdough starter and DIY was all the rage – Home Improvement & Furnishings chains have faced a tough environment. Many deferred or abandoned home improvement projects in the wake of inflation, and elevated interest rates coupled with a sluggish housing market put a further damper on the category.
Against this backdrop, Home Improvement & Furnishings’ relatively lackluster Q1 visit performance should come as no surprise. But the narrowing of the visit gap in March – which also saw one week of positive visit growth – may serve as a promising sign for the segment. (The abrupt foot traffic drop during the week of March 25th, 2024 is likely a just reflection of Easter holiday shopping pattern.)
Within the Home Improvement & Furnishings space, some bright spots stood out in Q1 – including Harbor Freight Tools, which saw visits increase by 10.0%, partly due to the brand’s growing store count. Tractor Supply Co., Menards, and Ace Hardware also registered visit increases.
January 2024’s stormy weather left its mark on the Q1 retail environment, especially for discretionary categories. But as the quarter progressed, retailers rallied, with healthy YoY foot traffic growth that peaked during the last week of March – the week of Easter Sunday. All in all, retail’s positive Q1 performance leaves plenty of room for optimism about what’s in store for the rest of 2024.
This report includes data from Placer.ai Data Version 2.0, which implements improvements to our extrapolation capabilities, adds short visit monitoring, and enhances visit detection.
Over the past year, Fast-Casual & Quick-Service Restaurant (QSR) chains have thrived, consistently outperforming the Full-Service Dining segment with positive year-over-year (YoY) visit growth every quarter since 2023. In this white paper, we dive into the data for leading dining chains to take a closer look at what’s driving visitors to the QSR segment and what other dining categories can learn from fast-food’s success.
One of the key factors separating QSR chains – aptly known as “fast food” – from the rest of the dining industry is the speed at which diners can get a ready-to-eat meal in their hands. And within the QSR space, speed of service is one of the ways chains differentiate themselves from their competition.
Leading fast-food chains are investing heavily in technologies and systems designed to help them serve customers ever more quickly:
Taco Bell’s “Touch Display Kitchen System” is designed to optimize cooking operations and improve wait times, while the chain’s Go Mobile restaurant format seeks to alleviate bottlenecks in the drive-thru lane. Chick-fil-A also has dedicated channels for quick mobile order pick-up and is planning four-lane drive-thrus with second-floor kitchens to get meals out even faster. And to save time at the drive-thru, Wendy’s is experimenting with generative AI and developing an underground, robotic system to deliver digital orders to designated parking spots within seconds.
And location intelligence shows that all three chains are succeeding in reducing customer wait times. Over the past four years, Taco Bell, Chick-fil-A, and Wendy’s have seen steady increases in the share of visits to their venues lasting less than 10 minutes.
The data also suggests that investment in speed of service can increase overall visitation to QSR venues.
In late 2022, McDonald’s opened a to-go-only location outside of Dallas, TX with a lane dedicated to mobile order fulfillment via a conveyor belt. And in Q1 2024, this venue not only had a larger share of short visits compared to the other McDonald’s locations in the region, but also more visits compared to the McDonald’s average visits per venue in the Dallas-Fort Worth CBSA.
This provides further support for the power of fast order fulfillment to drive QSR visits, with customers motivated by the prospect of getting in and out quickly.
The success of the fast-food segment is even driving other restaurants to borrow typical QSR formats – especially during time slots when people are most likely to grab a bite to eat on the go.
In September 2023, full-service leader Applebee’s opened a new format: a fast casual location focusing on To Go orders in Deer Park, NY, featuring pick-up lockers for digital orders and limited dine-in options without table service.
And the new format is already attracting outsized weekday and lunchtime crowds. In Q1 2024, 20.5% of visits to the chain’s To Go venue took place during the 12:00 PM - 2:00 PM time slot, while the average Applebee’s in the New York-Newark-Jersey City CBSA received less than 10% of its daily visits during that daypart. The new restaurant also drew a significantly higher share of weekday visits than other nearby venues.
This suggests that takeaway-focused venues could help full-service chains grow their visit share during weekdays and the coveted lunch rush, when consumers may be less inclined to have a sit-down meal.
An additional factor contributing to QSR and Fast Casual success in 2024 may be the rise of chicken-based chains. Chicken is a versatile ingredient that has remained relatively affordable, which could be contributing to its growing popularity and the rapid expansion of several chicken chains.
Comparing the relative visit share (not including delivery) of various sub-segments within the wider Fast Casual & QSR space showed that the share of visits to chains with chicken-based menus has increased steadily between 2019 and 2023: In Q1 2024, 15.3% of Fast Casual & QSR visits were to a chicken restaurant concept, compared to just 13.4% in Q1 2019.
The strength of chicken-based concepts is also evident when comparing average visits per venue at leading chicken chains with the wider Fast Casual & QSR average.
Both Chick-fil-A, the nation’s predominant chicken chain, and Raising Cane’s, a rapidly expanding player in the fast-food chicken space, are receiving significantly more visits per venue than their Fast Casual & QSR peers: In Q1 2024, Raising Cane’s and Chick-fil-A restaurants saw an average of 153.0% and 237.7% more visits per venue, respectively, compared to the combined Fast Casual & QSR industries average.
The elevated traffic at chicken chains likely plays a part in their profitability per restaurant relative to other Fast Casual & QSR concepts with more sizable fleets.
QSR and Fast-Casual chains are also particularly adept at generating seasonal visit spikes through unique Limited Time Offers and holiday promotions adapted to the calendar.
Arby’s recently launched a 2 for $6 sandwich promotion on February 1st, with two of the three sandwich options on promotion being fish-based in an apparent attempt to entice diners eschewing meat in observance of Lent. The company also brought back a specialty fish sandwich, likely with the goal of further appealing to the Lent-observing demographic.
The offers seem to have driven significant traffic spikes, with foot traffic during the promotion period significantly higher than the January daily visit average. And traffic was particularly elevated during Lent – which this year fell on Wednesday, February 14th through Thursday, March 28th, with visits spiking on Fridays when those observing are most likely to seek out fish-based meals.
Some of the elevated visits in the second half of Q1 may be attributed to the comparison to a weaker January across the dining segment. But the success of the fish-forward promotion specifically during Lent suggests that the company’s calendar-appropriate LTO played a major role in driving visits to the chain.
Shorter-term promotions – even those lasting just a single day – can also drive major visit spikes.
Since 1991, White Castle has transformed its fast-food restaurants into a reservation-only, “fine-dining” experience for dinner on Valentine's Day. In 2024, Valentine’s Day fell on a Wednesday, and White Castle’s sit-down event drove a 11.8% visit increase relative to the average Wednesday in Q1 2024 and a 3.9% visit increase compared to the overall Q1 2024 daily average.
The elevated visit numbers over Valentine’s Day are even more impressive when considering that a full-service dining room can accommodate fewer visitors than the drive-thrus and counter service of White Castle’s typical QSR configuration. The spike in February 14th visits may also be attributed to an increased number of diners showing up throughout the day to take in the Valentine’s Day buzz.
QSR and Fast-Casual dining are having a moment. And the data shows that a combination of factors – including fast and efficient service, the rising popularity of chicken-based dining concepts, and effective LTOs – are all playing a part in the categories’ recent success.
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.
