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This year’s March Madness really lived up to its name, buoyed by the star power of Caitlin Clark, Angel Reese, Paige Bueckers, and Juju Watkins driving viewership to new heights. For the first time in history, the NCAA women’s basketball title drew more viewers than the men’s at 18.9M for the women’s and 14.8M for the men’s, per Nielsen.
Tickets to the Final Four cost $532 on average, an 82% increase over last year, and for the championship game, Rocket Mortgage Fieldhouse Stadium in Cleveland, OH was packed to the gills.
In the days leading up to the women’s final, nearby hotels saw visits increase as well.
Last week, we took a look at where the retail sector stood after Q1 2024, with a focus on superstores, home improvement, athletic footwear and apparel, and beauty. This week, to mark the release of short visit data with Placer’s Data Version 2.0 (which better captures visits that lasted 1 minute or longer for QSR/drive-thru locations) and the publishing of our latest dining whitepaper (The QSR Dining Advantage), we thought we’d take closer look at where the restaurant sector stands after Q1 2024.
When we looked at the restaurant category in January, most chains were reporting that visits were down on a year-over-year basis (which was partly a byproduct of inclement weather across much of the country) but that there was a sense of optimism about 2024. Looking at trends by category, we see that operators were justified in this optimism, as visit trends have increased on a year-over-year basis for most categories since late January. After adjusting for calendar shifts for both Valentine’s Day and Easter, we also see strong fine dining visits for these holidays, indicating that consumers remain motivated by holiday and events (a theme we called out several times last year).
We’ve also been fielding several questions about daypart shifts given that the Placer.ai Nationwide Office Building Index (an index of data from some 1,000 office buildings across the country) continued to show an uptick in visits during March 2024 and now stands at about 67.3% of March 2019 visits. Below, we show the percentage of visits by daypart for quick-service restaurant (QSR) and full-service restaurant chains. Given the lift in office visits, it’s not surprising that we continue to see improvement in early morning (6:00 AM-9:00 AM) visits, but it’s notable that we continue to see strength in late morning (9:00 AM-12:00 PM) and afternoon (3:00 PM-6:00 PM) visits. We’ve already seen many QSR chains test new menu items that better address consumer preferences in these dayparts–McDonald's CosMc’s is just one example--and we’d expect more in the months ahead. We also continue to see strength in late night QSR visits, something that we’ve called out in the past. On the full-service dining front, we see 2023 visits still down compared to 2019 levels, but with improvement versus 2021 in most cases. Here, it’s interesting that the afternoon visits to full-service dining chains in 2023 is down only slightly compared to 2019, while the gap during the evening daypart is much wider. This reinforces some of our previous analyses on earlier dining times
With our Data Version 2.0 update, we can now more accurately monitor dwell time by restaurant channel. After bottoming-out in Q2 2020 as most chains shifted to a largely takeout model, we’ve seen dwell time steadily increase across most restaurant channels the past several years. The QSR and fast casual categories remain below pre-pandemic levels, which isn’t a surprise given an increase in drive-thru and takeout orders compared to 2019 levels. Still, some of the operators we’ve spoken to have indicated that drive-thru bottlenecks have become more of an issue in recent quarters, which may reflect in the increase in dwell times for the QSR category the past 4-5 quarters. On the other side of the spectrum, dwell time for casual dining chains has fully recovered. We believe this has been helped by the continued popularity of eatertainment concepts, which have almost twice the average dwell time as most casual dining chains. We also see that fine dining dwell time now exceeds pre-pandemic levels, which may be the result of consumers’ aforementioned focus on holiday/event dining, which tends to drive dwell times higher.
Restaurant chains still face obstacles–the spread between food at home (grocery prices) and food away from home (restaurant prices) remains high and the $20 minimum wage for QSR workers recently went into effect in California (our data does not indicate major visit changes going into effect as it may be too recent for behavioral changes to be noticeable). However, March and early April visitation trends help the optimism that many restaurant operators felt at the beginning of the year. With Panera (and other chains) evaluating a possible IPO and many other brands finally accelerating growth plans (with an increased emphasis on higher-growth markets in the Southern/Southeastern U.S.), we’d expect visitation trends to remain positive on a year-over-year basis in the months to come.
Say the word New Mexico and one might picture the stunning cliff dwellings at Bandelier Monument, rich troves of Native American Pueblo culture, or the stunning artworks of Georgia O’Keefe. This vibrant state’s largest city is Albuquerque, but Santa Fe also lays claim to fame by being the oldest state capital in the United States.
In Albuquerque, a large development is taking place centered around the Indian Pueblo Cultural Center. While one may be a bit surprised at its location, which is within an outdoor shopping center, it serves as a perfect anchoring point for a convention or a leisure trip. The museum features insights into 19 Pueblo cultures, and also hosts an authentic Indian kitchen where one can try indigenous favorites such as red chile beef stew, calabacitas, and assorted fruit pies. There is a Holiday Inn Express & Suites and a Towneplace Suites by Marriott just across the street for those who need accommodations. Meetings, parties, and events can be held onsite with particularly memorable experiences to be had in the outdoor arena and fire pit. One can even hold a wedding at the venue. And in a sign of the convenience store trend we are seeing towards localization, Four Winds offers a walk-in humidor with cigar selection, the ability to fill a growler with local craft beers, and an assortment of food, beer, wine, liquor, and tobacco.
Further afield, an hour away in Santa Fe, visitors flock to the galleries galore, restaurants and bars like Coyote Cantina, or simply enjoy an ice cream while people watching at Santa Fe Plaza. One of the highlights for opera lovers around the world is coming to Santa Fe Opera House during its season, which runs from the end of June to the end of August. Here, one can enjoy the unique open-air aspect of the opera house while sobbing along to the sad fate of Violetta in La Traviata.
Junior Rangers might enjoy exploring Carlsbad Caverns, Aztec Ruins National Monument, or venture to Petroglyph National Monument. Adults seeking R&R can ski the day away in Taos or opt for a therapeutic visit to Ojo Caliente Mineral Springs Resort & Spa. A review of the resort describes it as “Just you, the blue New Mexico sky, peace and quiet.” Add to that a massage or spa treatment, and it sounds like just what the doctor ordered.
One of the major employers in New Mexico is Los Alamos National Laboratory. A visit to the National Historic Park there will take you on an intriguing journey of key sites that were relevant to the Manhattan Project. Between last summer’s Oppenheimer blockbuster and current global sensation The Three-Body Problem fanning interest in cutting-edge science, this is a must-see location.
Albertsons Companies is one of the largest grocers in the country, with around 20 grocery banners in its portfolio boasting around 2,200 stores in 34 states. Aside from its eponymous brand, Albertsons, the company owns major chains like Safeway and Vons, as well as smaller regional banners.
With Q1 2024 under wraps, we take a closer look at visit trends to some of Albertsons Companies’ main banners, examine the top-performing chains by state, and dive into the demographics in the company’s two largest markets.
Diving into 2023’s visits shows that the company’s eight major banners – Albertsons, Safeway, Vons, Jewel-Osco, ACME Markets, Shaw's Supermarket, United Supermarkets, and Tom Thumb – enjoyed year-over-year (YoY) visit growth during every quarters of the year. Visits to Jewel-Osco, and Shaw’s Supermarket were particularly elevated, with Q4 2023 visits YoY up 5.8%, and 5.9%, respectively.
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Albertsons Companies’ positive performance has continued in 2024. Visits to most of the chains remained positive YoY in January despite the chilling retail impact of early 2024’s arctic blast, and all banners saw significant growth in February and March.
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Albertsons Companies is headquartered in Boise, Idaho, and its eponymous banner is highly popular in the western United States. But the company has also gained a foothold in the South, Midwest, Mid-Atlantic, and Northeast – and solidified its dominance in the West – through several successful mergers.
The company’s strategy of acquiring regional channels means that most states now have an Albertsons Companies’ banner catering to local grocery shoppers. Nationwide, the company’s most visited chains are Albertsons and Safeway – likely due to the sheer number of locations – but regional chains like Tom Thumb in Texas and Jewel-Osco in the Midwest are still the reigning Albertsons Companies banners in their areas.
California and Texas, the country's two most populous states, also boast the highest number of Albertsons Companies-owned grocery chains. Analyzing the demographic differences between the trade areas of the top three Albertsons Companies banners in each of the two states shows how the company leverages its banner variety to reach a larger audience.
According to the STI:Popstats 2023 dataset, the median household income (HHI) in Texas is $75.9K. Two of the top three Albertsons Companies’ banners in the state had a trade area median HHI below the Texas statewide median – United Supermarkets at $58.7K/year, and Albertsons at $68.3K/year – while Tom Thumb drew visitors from neighborhoods with a median HHI of $99.5K. And in California, although all three most visited Albertsons Companies banners drew visitors from neighborhoods with a median income above the statewide median, the trade area HHI also exhibited a range – from $99.2K/year for Albertsons to $115.0K/year for Safeway.
The variance in median HHI by banner and state highlights the benefit of operating grocery banners that can attract a range of shoppers from all along the income scale. By offering shopping options that cater to shoppers of all kinds, Albertsons Companies can hope to maximize its market reach and attract a diverse array of consumers.
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Albertsons Companies has set up shop across the country and offers a wide range of shoppers multiple grocery experiences across regions and price points. Will its grocery banners continue to see elevated foot traffic into 2024?
Visit placer.ai to stay on top of the latest grocery developments.
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.
About the Mall Index: The Index analyzes data from 100 top-tier indoor malls, 100 open-air shopping centers (not including outlet malls) and 100 outlet malls across the country, in both urban and suburban areas. Placer.ai leverages a panel of tens of millions of devices and utilizes machine learning to make estimations for visits to locations across the country.
Shopping centers are making a comeback. Following an unusually cold January that impacted retail visit trends across the country, mall visits increased year-over-year (YoY) in February 2024 and rose even higher in March: Last month, traffic to Indoor Malls, Open-Air Shopping Centers, and Outlet Malls was up 9.7%, 10.1%, and 10.7% respectively, compared to March 2023.
The positive visitation trends along with the rising consumer sentiment numbers capping off the first quarter of 2024 bode well for retail in general and discretionary categories in particular – and may signal the end of the retail challenges that plagued much of 2022 and 2023.
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Comparing Q1 visits to malls in 2021, 2022, 2023, and 2024 to Q1 2019 further highlights the positive trajectory of the ongoing mall recovery. The data reveals that the pre-pandemic visit gap has been steadily narrowing over the past four years across all shopping center formats. And in Q1 2024, visits to Open-Air Shopping Centers even exceeded 2019 levels for the first time since the lockdowns – indicating that retail has not yet fully settled into a “new normal” and the post-COVID recovery story is still being written.
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But even as mall visit numbers may be returning to pre-pandemic levels, analyzing the visitor journey for malls in Q1 2019 and Q1 2023 – which looks at where mall visitors were directly before and after their mall visit – indicates that some mall-based shopping habits have shifted.
Between Q1 2019 and Q1 2024, the share of shoppers coming to a mall directly from home or returning home directly following the mall visit decreased. And during the same period, the share of mall visitors coming from or going to dining venues or other retail locations before or after a mall visit generally increased across mall formats. The change in visitor journey between 2019 and 2024 indicates that more consumers are now visiting malls as one of multiple stops within a larger outing.
The fact that consumers are still visiting malls, even if they are no longer treating shopping centers like a one-stop-shop can be seen as another testament of malls’ resilience: Despite the string of big-name retailers expanding off-mall in recent years, shoppers continue incorporating malls into their shopping and dining routines – even as they expand their outing to add stops to off-mall shopping or dining locations as well.
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Despite the years of mall apocalypse predictions, consumer behavior continues to showcase the central role that malls play in the U.S. retail landscape. And even as consumer habits change, top shopping centers have proven capable at adapting their offerings to current consumer appetites to maintain their relevance in 2024 and beyond.
For more data-driven retail insights, visit our blog at placer.ai.
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 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.
Is return-to-office picking up steam?
Last month, location intelligence indicated that the office recovery needle was starting to move once again. Whether due to stricter corporate mandates – especially in the finance sector – or to employees seeking to reap the rewards of in-person collaboration and mentoring, office activity appeared to be on an upswing.
But what’s happened since then? Has the momentum worn off, or is RTO still trending on the ground?
Hybrid work may be here to stay – but the situation on the ground remains very much in flux. Last month, office visits nationwide were just 32.7% below what they were in March 2019 (pre-pandemic). This represents a significant narrowing of the visit gap in relation to March 2022 and March 2023 – when visits were down 48.2% and 36.3%, respectively.
And comparing monthly visits to a March 2022 baseline shows that visits last month were among the highest they’ve been since COVID. Only August 2023 (which had two more working days than March) and October 2023 featured higher visitation rates.
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Drilling down into the data for eleven major cities nationwide shows that Miami and New York are holding firmly onto their regional RTO leads – with less than a 20% visit gap compared to pre-pandemic levels. And RTO appears likely to continue apace in both cities, driven by tech companies in Miami and finance firms in the Big Apple. Indeed, in Miami, visits to office buildings in March 2024 were the highest they’ve been in four years. Washington, D.C., Dallas, Atlanta, and Denver also outperformed the nationwide baseline compared to pre-COVID, while Chicago, Boston, Houston, Los Angeles, and San Francisco lagged behind.
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But despite bringing up the rear for overall post-COVID office recovery, San Francisco has been experiencing outsize YoY office visit growth for some time now. And in March 2024, the city continued to lead the regional YoY visit recovery pack – tied for first place with Washington, D.C.
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Given San Francisco’s stubbornly large post-COVID visit gap, it may come as no surprise that the city’s office vacancy rate is higher than it’s ever been. But demand for office space in San Francisco is back on the rise, leading market observers to conclude that bright times may be ahead for the local market.
San Francisco’s strong YoY office visit performance may be a reflection of this increased demand, providing another sign of good things to come in the Golden Gate city.
Remote work carries plenty of benefits, but a variety of factors – from Gen Z work-from-home fatigue to the better wages and opportunities available to on-site employees – are driving increased office attendance. And if March 2024 data is any indication, further shifts in the RTO/WFH balance may yet be in the cards.
For more data-driven return-to-office updates, follow Placer.ai.
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 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.
