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2024 was a challenging year for the restaurant industry, marked by increased competition from other food retail channels, intensified value wars, and rising operational costs, all of which contributed to a surge in bankruptcies. The start of 2025 has been equally difficult.
Despite these challenges, our data continues to show strong consumer demand for dining out. However, the way consumers interact with restaurants is evolving more than ever before. Below, we highlight several key shifts in consumer behavior that restaurant operators, suppliers, and investors should consider in the year ahead.
With Starbucks' renewed focus on its coffeehouse roots under CEO Brian Niccol, an important question emerges: have today’s restaurants become too complex? Starbucks originally built its brand as a “third place” away from home and work – an inviting space for customers to gather. However, this focus began shifting about a decade ago with the rollout of Mobile Order and Pay. As e-commerce surged in the early 2010s, consumers became accustomed to making purchases online or via mobile apps, making digital ordering a necessity for most retailers and restaurants. Yet, prioritizing convenience through mobile ordering and pickup created a disconnect with Starbucks’ experience-driven identity, leading to friction between its convenience-oriented and experience-focused customers.
This tension between experience and convenience has been a challenge for many restaurant operators in recent years. It explains why QSR chains have reduced store footprints while expanding drive-thru capacity, why fast-casual and casual-dining restaurants have increasingly adopted pickup and drive-thru windows, and why many chains now allocate dedicated space for delivery orders. Even Darden, long resistant to third-party delivery, ultimately embraced it to adapt to changing consumer behavior.
Visitation trends in 2024 reinforced the difficulty of balancing experience and convenience within the same restaurant model. Among chains with more than 100 locations, those with the highest year-over-year (YoY) growth in visits per location were largely drive-thru specialists, such as Raising Cane’s, In-N-Out Burger, 7 Brew Coffee, and PJ’s Coffee. Meanwhile, non-drive-thru leaders like CAVA and Chipotle thrived by focusing on customization, underscoring that consumers are willing to pay a premium for personalized experiences that align with their preferences.
The rise of convenience-based restaurants does not signal the end of experiential dining – far from it. Below, we’ve outlined monthly year-over-year (YoY) visit trends for major restaurant categories in 2024. While QSR value wars dominated industry headlines throughout the year, casual- and fine-dining chains actually outperformed the QSR segment in YoY visit growth.
Some of this success can be attributed to well-executed promotions, such as Chili’s "3 for Me" deal – which helped the chain finish just behind Raising Cane’s in visit-per-location growth for 2024 – and Buffalo Wild Wings’ "All You Can Eat Wings" promotion. However, the strong YoY performance of fine-dining chains further underscores that experience-driven dining remained highly in demand throughout the year.
We also see this trend reflected in dwell time across the restaurant industry. With the rise of drive-thru and takeout orders during and after the pandemic, combined with advancements in mobile ordering technology, it’s no surprise that dwell times for limited-service restaurants have remained below pre-pandemic levels (below). However, the opposite is happening in full-service restaurant categories, where dwell times are on par with or even exceeding pre-pandemic levels.
While many casual dining chains have seen an increase in takeout and delivery orders over the past few years, the growth of experiential dining concepts like Kura Sushi and GEN Korean BBQ, along with the continued expansion of eatertainment venues such as Topgolf, Puttshack, and Pinstripes—where dwell times often exceed 90 minutes—has helped maintain overall category dwell times. Meanwhile, the increase in dwell time for fine-dining establishments suggests that guests are making the most of their time when dining out, reinforcing the growing consumer preference for experience over convenience.
We've previously highlighted the importance of familiarity in consumer dining decisions, particularly in a challenging macroeconomic environment. With years of elevated inflation across food, rent, healthcare, and insurance, consumers have fewer discretionary dollars to spend. As a result, when they choose to dine out, they gravitate toward brands they know and trust.
In collaboration with the team at Bloomberg Second Measure, we analyzed data on the percentage of revenue generated from new customers at both full-service and limited-service restaurants. Our findings revealed a noticeable decline in new customer revenue during the second half of 2024, further reinforcing the idea that consumers are prioritizing familiarity when making dining choices.
This preference for familiar brands may be creating challenges for restaurant chains expanding into new markets. Traditionally, a new restaurant location in an unfamiliar market could expect to generate around 75% of the sales/visits seen in an established market—after an initial “honeymoon” phase when consumers try the brand for the first time. However, our data suggests that visit trends for restaurants entering new markets are now significantly lower than historical averages. Unsurprisingly, many operators have told us that their 2025 expansion plans will prioritize in-filling existing markets rather than expanding into new ones.
Portillo’s—the Chicago-based chain known for its Chicago-style hot dogs, Italian beef sandwiches, and char-grilled burgers—has experienced mixed visit trends when entering new markets. Below, we present visit per location trends for Portillo’s nationwide, in its home market of Chicago, and in several states where it has expanded in recent years. In its latest investor presentation, Portillo’s acknowledged that its average unit volumes are highest in its home market ($11.3 million in sales per location), compared to other Midwest markets ($6.0 million) and Sunbelt locations ($6.6 million). While these figures are still strong, they reflect the broader challenge that many restaurant brands face when expanding beyond their core markets.
Conclusion
As the restaurant industry navigates 2025, operators must strike a delicate balance between convenience and experience while adapting to shifting consumer preferences. The demand for dining out remains strong, but consumers are making more intentional choices, favoring trusted brands and prioritizing either speed and efficiency or immersive, experiential dining. At the same time, new market expansion presents growing challenges, with visit trends suggesting a preference for familiarity over novelty. As brands refine their strategies, those that successfully integrate innovation with operational excellence—whether through streamlined digital convenience, compelling promotions, or differentiated in-store experiences—will be best positioned for long-term success in an increasingly competitive landscape.
Sprouts Farmers Market and Dutch Bros. have seen impressive foot traffic growth over the past few years. We analyzed their visitation metrics for 2024 to understand what’s driving their continued success.
Both Sprouts and Dutch Bros. posted impressive visitation numbers throughout 2024, with visits for the full year elevated by 7.3% and 15.8%, respectively, compared to 2023. This momentum caps off several years of sustained growth – particularly for Dutch Bros. – which has expanded rapidly while maintaining consistent foot traffic increases. And though average visits per location at Dutch Bros. were slightly down YoY in 2024, the visit gaps were relatively modest – indicating that the chain is succeeding in expanding with minimal cannibalization to its existing venues.
Sprouts also expanded with dozens of new stores over the past year – and the chain’s foot traffic metrics suggest strong shopper interest in these openings. The health-forward grocer saw visits per location rise in the second half of the year, capping off Q4 2024 with a 5.0% YoY increase.
The two chains have kept their visit growth going into the new year. Weekly visits to both Sprouts and Dutch Bros. grew all weeks analyzed, a promising sign as 2025 gets underway.
Smoothies are having a major moment, fueled by the growing nationwide focus on health and wellness – an area where Sprouts has successfully positioned itself as a leader. Now, the chain is doubling down on its wellness-focused strategy by introducing smoothies at select locations.
Many Sprouts locations offer smoothies to go – but the chain has also been investing in in-store smoothie bars, allowing shoppers to enjoy a fresh, healthy drink while browsing or take one on the go. Visits to a Cerritos, California location jumped following the introduction of a smoothie bar in January 2025, with YoY monthly visits exceeding the Sprouts nationwide average for the first time in the analyzed period – perhaps thanks to excited reviews posted on social media.
By offering smoothies that are more affordable than some of the viral options trending online, Sprouts is solidifying itself as a go-to destination for shoppers seeking wellness-driven choices without breaking the bank.
While Sprouts is expanding into new beverage categories, Dutch Bros is focusing on building out its food offerings. The chain has traditionally been strongest in the afternoon and evening, bucking the usual trends for caffeine-focused brands. To that end, Dutch Bros. has focused on attracting more morning visitors, both by expanding its mobile ordering capabilities and by testing a new food menu in select locations.
The data suggests that the company’s focus on the morning daypart may amplify changes in Dutch Bros. consumer behavior that are already underway. Between January 2024 and January 2025, the share of visits during morning hours saw a small but meaningful uptick. The share of visits during the 6:00 AM to 11:00 AM daypart grew from 28.4% to 29.5% of daily visits, while the share of evening visits (4:00 PM to 9:00 PM) decreased. While the brand still maintains a strong presence later in the day, this shift could be a sign that Dutch Bros is successfully nudging consumers toward earlier-day coffee runs.
Sprouts and Dutch Bros. are thriving by gearing their offerings to their customer bases. By leaning into health-forward beverages and early-morning visits, the two chains are driving visits and interest.
For more data-driven insights, visit Placer.ai.
The off-price apparel space remains well-positioned as consumers continue to favor budget-friendly retailers. We dive into the latest location intelligence for the space – and category leaders Burlington, Marshalls, Ross Dress for Less, and T.J. Maxx – to explore how the segment closed out 2024 and started off in 2025.
The leaders of the off-price apparel space – Burlington, Marshalls, Ross Dress for Less, and T.J. Maxx – drove the success of the category last year. In 2024, Burlington’s visits increased (7.9%), as did visits to Marshalls (5.3%), Ross (0.7%) and T.J. Maxx (4.9%).
Zooming into H2 2024 reveals that Burlington, Marshalls, and T.J. Maxx saw consistent YoY visit growth. And although Ross Dress for Less saw mild visit gaps for some of the period, all four off-price apparel chains analyzed started the new year on a high note with January 2025 visits up across the board compared to the previous year.
Marmaxx, Ross, and Burlington expanded their real estate footprints in 2024 – likely contributing to the chains’ YoY visit increases. And all four retailers’ have plans to continue their expansion strategies in the coming years – putting them on a foot traffic growth trajectory for 2025.
The foot traffic growth of Burlington, Marmaxx, and Ross plays a significant role in the success of the off-price category, which has steadily increased its share of total apparel visits.
In Q4 2024, the off-price apparel category claimed a majority of the combined off-price and our traditional apparel category visits (51.9%) for the first time since at least 2019. This demonstrates the segment’s strong holiday performance and continued resilience in the face of economic headwinds for both consumers and retailers.
Diving deeper into the foot traffic for Burlington, Ross, Marshalls, and T.J. Maxx highlights robust nationwide visits as well as several regional preferences among consumers.
Nationwide, Ross claimed the lion’s share of visits between the four chains in Q4 2024 (31.0%), followed by T.J. Maxx (28.0%), Marshalls (23.1%), and Burlington (17.9%).
Analysis of the chains’ share of visits by CBSA reveals that Ross claimed the greatest share of visits in a majority of the West and Southwest, as well as in many large metropolises. Meanwhile, T.J. Maxx appeared to be the most-visited brand in many CBSAs throughout the Eastern United States, while Marshalls appeared to be the preferred brand in the Mid-Atlantic.
And despite claiming 17.9% of combined visits to the four off-price apparel chains, Burlington received the largest share of visits in only two CBSAs – Midland, TX and Anchorage, AK, which could be due to the brand’s long-term smaller-format strategy. While a smaller-format store may have less physical real estate (and therefore visitor potential) than the typical Marmaxx and Ross location, it affords Burlington the flexibility to source locations with strong economics that can drive productivity for the brand in markets nationwide.
All four brands have a robust presence nationwide, yet regional preferences and variations in real estate footprints highlight the different paths to success in the off-price space.
The off-price apparel segment is thriving in 2025, with Burlington, Marshalls, Ross, and T.J. Maxx leading the charge. Consumers continue to prioritize value, fueling steady foot traffic growth and cementing off-price retailers as key players in the apparel space. Each brand is carving out its own regional strongholds while expanding its footprint, setting the stage for even greater success in the year ahead.
Want more data-driven insights? Visit Placer.ai.
How did Walmart, Target, and wholesale clubs perform in 2024? What do early 2025 foot traffic trends tell us about superstores’ growth potential in the coming year? And what do visitation patterns at Target and Walmart reveal about the role each chain plays in the wider retail landscape? We dove into the data to find out.
Wholesale clubs outperformed more traditional superstores in 2024, as Costco, BJ’s, and Sam’s Club saw 4.8% to 7.2% YoY increases in visits while Target and Walmart’s traffic remained relatively flat. And though wholesale clubs continued outperforming Target and Walmart in the new year as well, the two superstore leaders did see clear visit increases of 3.6% and 3.0%, respectively, in January 2025 – a promising sign for the retail giants’ growth in the year ahead.
Target and Walmart both operate national chains of one-stop shops that carry a variety of consumables and non-consumables, including groceries, apparel, toys, and electronics. But diving into the demographics of the two brand’s captured market reveals that each chain serves a slightly different audience.
Target tends to attract visitors from areas with higher HHI and larger households: The company’s captured market includes a larger share of both households with children and non-family (e.g. roommates) households than Walmart’s, perhaps due to Target’s relative appeal to both suburban and strongly urbanized segments. Meanwhile, Walmart seems to attract more repeat monthly visitors (who visit the chain at least twice a month), perhaps thanks to the chain’s extensive grocery offerings and to its popularity among rural and semirural segments who may not have a variety of retail options to frequent.
The two chains’ visitor base also exhibit differences in in-store behavior. Walmart visitors do seem to linger a little longer in store, with 20.7% of the chain’s visits lasting longer than 45 minutes compared to Target’s 17.1% – maybe thanks to the mission-driven shopping behavior of some of its rural and semirural customer base. But despite the longer visits, Walmart still receives a larger share of weekday visits than Target – perhaps thanks to its larger share of single shoppers with fewer weekday commitments.
For more data-driven consumer insights, visit placer.ai.
How did home improvement leaders The Home Depot and Lowe’s perform in 2024? And what lies ahead for the chains in 2025? We dove into the data to find out.
A challenging retail environment continued weighing on the home improvement space in 2024 as high prices and tighter consumer budgets led many consumers to push off discretionary renovations and remodels. As a result, visits to The Home Depot and Lowe’s remained below 2023 levels throughout 2024. Still, the visit gaps were relatively minor – The Home Depot received 1.6% to 3.5% fewer quarterly visits and Lowe’s saw a 2.2% to 4.7% visit gap relative to 2023 – a testament to the enduring strength of these home improvement giants.
Diving deeper into the daily visits data also reveals that, despite the challenges, the two retailers succeeded in driving significant visit boosts through promotions and holiday sales: Mother’s Day, Black Friday, and the Saturday of Memorial Day were the top three visited days for The Home Depot and Lowe’s in 2024. Lowe’s received its highest daily traffic boost on Mother’s Day – likely thanks to its free plant giveaway – while The Home Depot saw its largest visit surge over the traditionally busy Black Friday. Finally, Memorial Day sales drove the third largest visit peak for both chains.
The boost in consumer traffic during special events underscores the potential of seasonal promotions to drive engagement and foot traffic – even in times of wider retail headwinds and economic uncertainty.
Both The Home Depot and Lowe’s received fewer visitors in 2024 compared to 2023, but a closer look reveals that the YoY dips in repeat visitors (who visited at least twice a month) were larger than the declines in casual (once a month) shoppers. For example, in December 2024, the number of casual visitors to The Home Depot dipped 3.0% YoY while the number of repeat monthly visitors declined by 4.0% compared to 2023. YoY visitor trends to Lowe’s generally followed a similar trend.
This trend suggests that, with home sales at their lowest levels since 1995 and many consumers looking to avoid non-essential expenditures, demand for large-scale renovations may be slowing. As a result, contractors and homeowners undertaking major remodeling projects are likely visiting these stores less frequently.
But while these trends may be hampering home improvement visits in the short term, the current downturn could also be setting the stage for a future recovery – as a stabilizing economy could unleash significant pent-up demand.
Visits to the country’s two largest home improvement retailers, while not yet returned to their pandemic-era highs, are beginning to stabilize. Will 2025 see a return to normal for the chains?
Visit Placer.ai to keep up with the latest data-driven retail insights.
With consumer interest in wellness showing no sign of slowing down, we dove into fitness foot traffic data to see how the segment performed in 2024 and understand what the new year holds for the category.
The fitness category has yet to hit its peak. Following consistent year-over-year (YoY) growth in monthly visits throughout 2024, traffic to the category rose again in January 2025 with visits 2.3% higher than in January 2024 – a strong start for what is likely to be another standout year in the fitness space.
And while some may consider New Year’s resolutions to be an outdated, unhelpful institution, the data indicates that January still drives a significant fitness spike as Americans across the country commit to their wellness goals at the start of the year.
Fitness visits in January 2025 were 21.2% higher than in December 2024 – only a slightly lower spike than the month-over-month (MoM) January 2024 jump of 23.4% – indicating that New Year’s resolutions are still quite popular in 2025. At the same time, the slightly lower MoM growth in January may also reflect the relatively stable visitation trends throughout 2024 – a shift from the traditional patterns of fitness chains losing about 30% of their members each year.
Diving into individual fitness chains reveals that the category’s ongoing success is driving visit growth across the fitness segment – including at budget gyms such as Planet Fitness and Crunch Fitness, mid-range chains such as LA Fitness, and premium brands such as Life Time. And critically, both overall visitors and visit frequency were consistently elevated in H2 2024 and going into 2025, indicating that not only are more people going to the gym – they’re also generally going more frequently. It seems, then, that the wellness trend of the past few years is still gaining momentum.
While the increased interest in wellness seems to have brought a boost in industry-wide fitness visits, analyzing visit frequency by brand and quarter does reveal some differences – and some similarities – across different brand tiers.
All four brands analyzed – Planet Fitness, Crunch Fitness, LA Fitness, and Life Time – received the largest share of repeat visitors (at least twice a month) in Q1 2024, as New Year’s resolutions drove a boost in gym-going frequency. The share of repeat visitors then consistently fell throughout the year, and the chains (with the exception of Life Time) received the lowest share of repeat visits in Q4 as vacations and holidays likely interfered with people’s exercise schedule.
One might expect high value low price (HVLP) gyms to attract lower-usage members – since the modest fee may mean that members are not compelled to get the most bang for their buck – but looking at the data reveals that visit frequency did not necessarily correlate with membership pricing. While Planet Fitness and Crunch Fitness are both HVLP chains, their visit frequency patterns differed significantly: Planet Fitness seemed to attract a relatively high share of lower-usage members, while Crunch Fitness’ visit frequency exceeded that of higher-priced LA Fitness and was in fact was closer to that of premium chain Life Time.
For more data-driven consumer insights, visit placer.ai.
1. AI is raising the bar for physical retail as shoppers arrive more informed, more intentional, and less tolerant of friction – though the impact varies by category and format.
2. As discovery shifts upstream, stores increasingly serve as confirmation rather than discovery points where shoppers validate decisions through hands-on experience and expert guidance.
3. AI-based tools can improve in-store performance by removing operational friction – shortening trips in efficiency-led formats and supporting deeper engagement in experience-led ones.
4. By embedding expertise directly into frontline workflows, AI helps retailers deliver consistent, high-quality service despite high turnover and limited training windows.
5. AI enables precise, location-specific marketing and execution, allowing retailers of any size to align assortments, staffing, and messaging with real local demand.
6. Retailers can also use AI to manage their store fleets with greater discipline and understand where to expand, where to avoid cannibalization, and where to rightsize based on observed demand rather than static assumptions.
7. AI is not a universal lever in physical retail; its value depends on the store format, and in discovery-driven models it should support operations behind the scenes rather than reshape the customer experience.
Physical retail has faced repeated claims of obsolescence, from the rise of e-commerce to the shock of COVID. Each time, analysts predicted a structural decline in brick-and-mortar. And each time, physical retail adapted.
AI has triggered a similar round of predictions. Much of the current discussion frames retail’s future as a binary outcome: either stores become heavily automated, or e-commerce becomes so optimized that physical locations lose relevance altogether.
But past disruptions point in a different direction. E-commerce changed how physical retail operated by raising expectations for omnichannel integration, speed, and clarity of purpose. Retailers that adjusted store formats, merchandising, and operations accordingly went on to drive sustained growth.
AI likely represents another inflection point for physical retail. As shoppers arrive with more information, clearer intent, and even less tolerance for friction than in the age of "old-fashioned" e-commerce, physical stores will remain – but the standards they are held to continue to rise.
This report presents four ways retailers are using AI to get – and stay – ahead as physical retail adapts to this next wave of disruption.
E-commerce moved discovery earlier in the shopping journey. Instead of beginning the process in-store, many shoppers now arrive at brick-and-mortar locations after having deeply researched products, comparing options, and narrowing choices online – entering the store to validate rather than initiate their purchasing decision.
AI-powered shopping accelerates this pattern. Conversational assistants, recommendation engines, and AI-driven discovery across search and social reduce the time and effort required to evaluate options – and this shift is changing consumers' expectations around the in-store experience.
Apple shows what it looks like when a physical store is built for well-informed shoppers. Given the prevalence of AI-powered search and assistants in high-consideration categories like consumer electronics, Apple customers likely arrive at the Apple Store with more preferences already shaped by AI-assisted research than other retail categories.
Apple Stores were designed for this kind of customer long before AI became widespread. The layout puts working products directly in customers’ hands, merchandising emphasizes live use over promotional signage, and associates are trained to answer detailed technical questions rather than walk shoppers through basic options.
That alignment is showing up in store behavior. Even as AI-powered shopping expands, Apple Stores continue to see rising foot traffic and longer visits thanks to the store's specific and curated role in the customer journey – a place where customers confirm decisions through hands-on experience and expert guidance.
Some applications of AI extend trends that e-commerce has already introduced. Others address operational challenges that previously required manual coordination or tradeoffs.
AI can reduce friction and make store visits more predictable by improving staffing allocation, reducing checkout delays, optimizing inventory placement, and managing traffic flow. These changes reduce friction without altering the visible customer experience.
Sam's Club offers a clear, recent example of AI solving a specific in-store bottleneck. For years, customers completed checkout only to face a second line at the exit, where an employee manually scanned paper receipts and spot-checked carts.
In early 2024, Sam’s Club introduced computer vision-powered exit gates, allowing customers to exit the store without stopping as AI algorithms instantly captured images of the items in their carts and matched them against digital purchase data. Employees previously tasked with receipt checks could now shift their focus to member assistance and in-store support.
The impact was measurable. Sam’s Club reported that customers now exit stores 23% faster than under manual receipt checks, a result confirmed by a sustained nationwide decline in average dwell time. During the same period, in-store traffic increased 3.3% year-over-year – demonstrating how removing friction with AI can deliver tangible gains.
AI optimizes stores for different outcomes. At Sam’s Club, it shortens visits by removing friction from task-driven trips. At Apple, upstream research leads to longer visits focused on testing, questions, and decision validation. In both cases, AI aligns store execution with shopper intent – prioritizing speed and throughput in efficiency-led formats and deeper engagement in experience-led ones.
Beyond shaping store roles and streamlining operations, AI can also address a long-standing challenge in physical retail: delivering consistent, high-quality expertise on the sales floor despite high turnover and seasonal staffing. In the past, retailers relied on heavy training investments that often failed to pay off. AI can now embed that expertise directly into frontline workflows, allowing associates to deliver confident, informed service regardless of tenure and strengthening the in-store experience at scale.
In May 2025, Lowe’s rolled out a major in-store AI enhancement called Mylow Companion, an AI-powered assistant that equips frontline staff with real-time, expert support on product details, home improvement projects, inventory, and customer questions.
Mylow Companion is embedded directly into associates’ handheld devices, delivering instant guidance through natural, conversational interactions, including voice-to-text. This enables even newly hired employees to provide confident, expert-level advice from day one, while helping experienced associates upsell and cross-sell more effectively. The tool complements Mylow, a customer-facing AI advisor launched the same year to help shoppers plan projects and discover the right products, leading to increased customer satisfaction.
While AI alone cannot solve demand challenges—especially amid macroeconomic pressure on large-ticket discretionary spending—early signals suggest it may still play a meaningful role. Location analytics indicate narrowing year-over-year visit gaps at Lowe’s post-deployment, pointing to a potentially improved in-store experience. And Home Depot’s recent announcement of agentic AI tools developed with Google Cloud suggests that these technologies are becoming table stakes in this category.
As more retailers roll out similar capabilities, those that moved earlier are better positioned to help set the bar – and benefit as the market adapts.
Beyond improving the in-store experience, AI also gives retailers a powerful way to drive foot traffic through precision marketing. By processing large volumes of behavioral, location, and timing data, AI can help retailers decide who to reach, when to engage them, where to activate, and what message or assortment will resonate – shifting marketing from broad seasonal pushes to campaigns grounded in local demand.
Target offers an early example of this approach before AI became widespread. Stores near college campuses have long tailored assortments and messaging around the academic calendar, especially during the back-to-school season. In August, these locations emphasize dorm essentials, compact storage, bedding, tech accessories, and affordable décor – supported by campaigns aimed at students and parents preparing for move-in. That localized approach has been effective in driving in-store traffic to Target stores near college campuses, with these venues seeing consistent visit spikes every August and outperforming the national average across multiple back-to-school seasons from 2023 to 2025.
AI makes local execution repeatable at scale. By analyzing visit patterns, past performance, and timing signals across thousands of locations, retailers can decide which products to promote, how to staff stores, and when to run campaigns at each location. Marketing, merchandising, and store operations then act on the same demand signals instead of separate assumptions.
Crucially, AI makes this level of localization accessible to retailers of all sizes. What once required the resources and institutional knowledge of a big-box giant can now be achieved through precision marketing and demand forecasting tools, allowing brands to adapt each store’s messaging, assortment, and execution to the unique rhythms of its community.
Beyond improving performance at individual stores, AI can also give retailers a clearer view of how their entire store fleet is working – and where it should grow, contract, or change. By analyzing foot traffic patterns, trade areas, customer overlap, and visit frequency across locations, AI helps retailers identify which sites are truly reaching their target audiences and which are underperforming relative to local demand.
AI also plays a critical role in smarter expansion. Retailers can use it to identify markets and neighborhoods where demand is growing, customer overlap is low, and incremental visits are likely – reducing the risk of cannibalization when opening new stores. By modeling how shoppers move between existing locations, AI can flag when a proposed site will attract new customers versus simply shifting traffic from nearby stores, grounding expansion decisions in observed behavior rather than demographic proxies or intuition alone.
Equally important, AI helps retailers recognize when expansion no longer makes sense. By tracking total fleet traffic, visit growth, and trade-area saturation, retailers can assess whether new stores are adding net demand or diluting performance. The same signals can identify locations where demand has structurally declined, informing rightsizing decisions and store closures. In this way, AI supports a more disciplined approach to physical retail – one that treats the store fleet as a dynamic system to be optimized over time, rather than a footprint that only grows.
The impact of AI on physical retail will vary significantly by category and format. Not every successful store experience is built around efficiency, prediction, or pre-qualification. Retailers with clearly differentiated offline value don’t necessarily benefit from forcing AI into customer-facing experiences that dilute what makes their stores work.
“Treasure hunt” formats are a clear example. Off-price retailers like TJ Maxx, Marshalls, Ross, and Burlington continue to drive strong traffic by offering unpredictability, scarcity, and discovery that cannot be replicated – or meaningfully enhanced – through AI-driven search or recommendation. The appeal lies precisely in not knowing what you’ll find. For these retailers, heavy investment in AI-led personalization or pre-shopping guidance risks undermining the core experience rather than improving it.
Similar dynamics apply in other categories. Independent boutiques, vintage stores, resale shops, and certain specialty retailers succeed by offering curation, serendipity, and human taste rather than optimization. In these cases, AI may still play a role behind the scenes – supporting inventory planning, pricing, or site selection – but it should not reshape the customer-facing experience. AI is most valuable when it reinforces a retailer’s existing value proposition. Formats built around discovery, surprise, or experiential browsing should protect those strengths, even as other parts of the retail landscape move toward greater efficiency and intent-driven shopping.
AI is forcing physical retail to evolve with intention. By creating a supportive environment for customers who arrive with made-up minds, removing friction inside the store, offering the best in-store services, and orchestrating demand with greater precision, retailers are adapting to the new world standards set by AI. All five strategies focus on aligning stores with shopper intent – what customers want, how the store supports it, and when the interaction happens.
The retailers that win in this next era won’t be the ones that use AI to simply automate what already exists. They’ll be the ones that use it to sharpen the role of physical retail – turning stores into places that help shoppers validate decisions, deliver value beyond convenience, and show up at exactly the right moment in a customer’s journey.
In the age of AI, physical retail wins by becoming more intentional – designed around informed shoppers, optimized for the right outcome in each format, and activated at moments when demand is real.
If 2025 proved anything, it’s that the American consumer hasn’t stopped spending – they’ve just become incredibly selective about who earns their dollar. As we look toward 2026, success isn't just about weathering headwinds; it's about identifying the specific operational levers that drive traffic.
We analyzed the data to identify ten retail and dining standouts (presented in no particular order) that are especially well-positioned for the year ahead. From grocery icons mastering hyper-authenticity to fitness challengers proving that low price doesn't mean low quality, these companies have demonstrated a powerful understanding of their audience and the operational agility to meet them where they are.
Here – in no particular order – are the brands setting the pace for 2026.
When we pick retailers for our Ten Top list, there are some that rest on the edgier side and others that look fairly down the middle. Picking H-E-B, a grocer that has seen monthly visits up year over year (YoY) for all but one month since April of 2021, is clearly not one of the bolder claims. But consistent success shouldn’t preclude a retailer from receiving its well deserved kudos, and there are some unique reasons that H-E-B specifically needs to be included this year.
H-E-B exemplifies the single most important trend in retail: the need for a brand to have authenticity and a clear reason for being. The retailer understands its audience, and as a result, it’s able to optimize its merchandising, promotions, and experience to best serve that loyal customer base. This pops in the data when we see the loyalty H-E-B commands, especially when compared to the grocery average.
In addition, the chain has also embraced adjacent innovation, leveraging its existing fleet by adding True Texas BBQ to a growing number of locations. The offering not only helps maximize the revenue potential of each visit, it taps into the core identity of the brand, further deepening customer connection and authenticity. The strategy also signals H-E-B’s understanding of emerging consumer behaviors – particularly the increase in shoppers turning to grocery stores for affordable, restaurant-quality lunches. And this combination of expanding revenue channels while heightening H-E-B’s uniqueness should also carry over into the value and impact of its retail media network.
In short, H-E-B has not only identified a critical route to success, it continues to embrace channels that widen revenue potential while doubling down on foundational strengths.
In 2024, Michaels held nearly 32.0% of overall visit share among the top four retailers in the wider crafts and hobby space. By the second half of 2025, that number had skyrocketed to just over 40.0% – driven largely by the closures of key competitors JoAnn Fabrics and Party City.
And it isn’t just that the removal of competitors is increasing the share of overall visits; the rate of capture appears to be accelerating. In Q2 2025, visits rose 7.3% YoY as Michaels began absorbing traffic from Party City, which closed the bulk of its locations by March. Growth strengthened further in Q3, with visits up 13.1% YoY following the completion of JoAnn’s shutdown in May. But during the all-important Q4, traffic surged even higher YoY, suggesting that that consolidation alone doesn’t fully explain the gains.
While the tailwinds of competitor closures clearly help, there are other strategies that are helping the retailer maximize this wave. Whether it be NFL partnerships to boost the retailer’s Sunday role in American households, a push into the framing space with 10-minute custom framing, the addition of JoAnn’s branded merchandise to its offerings, or even a challenge to Etsy’s online dominance with a new marketplace – Michaels is making moves to take full advantage of their improved positioning. There is also an argument to be made that Michaels is the retailer best poised to benefit from the segment’s consolidation, given that it is also the most oriented to a higher income consumer among top players in the category. This could help unlock other more focused concepts and promotions, and better align with an audience now looking for a retail replacement.
Walmart is the dominant player in physical retail.
And they leverage this position to push forward new offerings that extend revenue potential while maximizing per-store impact. They are a pioneer in the retail media space and have been using their unique reach to push that side of the business forward. Add to that the fact that they have been among the savviest players in all of retail in identifying the ideal approach to omnichannel, utilizing their massive physical footprint to improve their reach via BOPIS and store-fulfilled e-commerce.
All good reasons for inclusion, right?
But, here’s the kicker - from a pure visit perspective, things are going from good to better. Between January and September 2025, Walmart visits were essentially flat year over year – a good position for a retailer with such a massive reach and such strength shown in recent years. Yet, since October, visits have actually been on the rise, with Q4 2025 showing a 2.5% YoY traffic increase and several weeks exceeding 4.0% YoY.
A retail giant with even more potential growth than we might have expected – and one that’s pushing the very strategies we believe are the key to future success? That’s certainly a reason for inclusion.
Including a department store again on this year’s list? It seems counterintuitive to many of the narratives that ran through 2025, especially as middle-class consumers continue to be squeezed financially. However, Dillard’s still appears to be an exception to the rule, with performance more closely aligned to that of luxury department store brands like Bloomingdales & Nordstrom than to its true competitive set.
In 2025, visitation to Dillard’s was essentially flat YoY – though the chain has consistently outperformed the wider department store category. Dillard’s stands at a unique point somewhere between a mid-tier and luxury department store, and that distinction may be its secret to success. The retailer continues to wow with strong private label offerings that rival and often exceed national brands, a diverse merchandise mix, and locations that often benefit from indoor mall traffic trends.
While Dillard’s lags behind the wider department store category, for example, in terms of repeat visitation and the share of wealthy visitors, these factors may actually create an advantage. Efforts by Dillard's to refresh its product mix through limited-edition capsule collections and new brand launches may be helping it attract a steady inflow of economically diverse new shoppers. And the ability to continually win over new segments without alienating a “core customer” could be a strength amid economic headwinds and waning consumer sentiment.
At the same time, a more diverse visitor profile means that Dillard’s can truly be the department store for many consumers, with a product range that strikes a chord with different shopper segments.
Department stores truly aren’t dead, and those who have found their reason to exist continue to garner attention with shoppers.
If the retail industry had a symbol for 2025, it was probably Labubu. The toy-and-collectible-turned–bag charm took consumers by storm in the second quarter of the year, and POP MART – the retailer responsible for bringing Labubus stateside – quickly became an overnight sensation. Visits to the chain surged over the summer at the height of the craze, while trade areas expanded as customers traveled significant distances to get their hands on a doll.
And although the frenzy cooled somewhat in early fall, visits to POP MART locations like the one in Tulalip, WA began trending upward once again in November 2025 as the holiday season approached, surging even higher in December. Trade area size also increased dramatically during the holiday shopping period, as consumers rushed to get their hands on the chain’s coveted line of festive blind boxes.
As demonstrated by the recent Starbucks Bearista craze, consumers are all-in on cool collectible items that make life more fun – a trend POP MART, strategically located in high-traffic malls popular with younger shoppers, is uniquely positioned to ride. During times of economic uncertainty, consumers crave small ways to indulge, and affordable collectibles that are cute, cuddly, and fun have worked their way into the American zeitgeist.
So, what is next for POP MART? Can it continue to sustain its momentum? It seems likely that Labubus are here to stay, at least for a little while longer, before the retailer hopefully strikes it big with the next “must have”.
When all is said and done, 2021-2025 will likely be viewed as a pivotal turning point for the U.S. coffee industry. As the country recovered from the pandemic, consumer interaction with coffee brands fundamentally shifted. With more employees working from home – bypassing the traditional pre-work coffee run – visit trends migrated to later in the morning and afternoon. Meanwhile, industry-wide dwell times shortened as consumers renewed their focus on convenience.
This move away from the sit-down café experience placed significant pressure on industry leaders, accelerating the shift toward drive-thru and mobile order-and-pay options. This moment of friction also created space for drive-thru-centric challengers like Dutch Bros, which rapidly expanded on the strength of speed and menu innovation.
Among these challengers, 7 Brew stands out as a fast-rising powerhouse heading into 2026. Expanding outward from its Arkansas roots, 7 Brew has been strategic about market entry and site selection for its unique double-drive-thru format. And with a concept that resonates with younger demographics and a footprint adaptable to various geographies, the coffee chain has become a go-to destination for rural and small-town communities, while also maintaining solid reach among more traditional coffee segments like wealthy suburbanites and urban singles. Thanks in part to this broad appeal, 7 Brew is well-positioned for future growth, even as it faces stiffer competition in new markets.
It is no secret that most of the growth in the QSR space over the past two decades has been driven by chicken concepts. Chick-fil-A, rising from a regional chain to a national player throughout the late 1990s and 2000s, was the first to disrupt the burger’s stranglehold on QSR. Raising Cane’s followed in the 2010s with a model built on menu simplicity and operational excellence, earning its place as one of the largest chains in the category. More recently, hot chicken has emerged as one of the fastest-growing segments – and Dave’s Hot Chicken is leading the charge.
No single factor accounts for Dave’s growth from a lone unit in Los Angeles to over 350 units today. Certainly, a wide assortment of sauces and flavor profiles has resonated with U.S. consumers who are increasingly seeking spicier products, while Dave’s 'rebel' brand positioning has successfully attracted younger audiences. And at a time when many QSR and fast-casual chains are abandoning urban locations in favor of suburban markets, Dave’s Hot Chicken continues to open predominantly in urban settings – a strategy that may prove advantageous as migration patterns shift back toward major cities this year.
With so much of the industry’s expansion driven by chicken concepts, it is natural to ask: Have we reached 'peak chicken'? While we are certainly seeing other categories gain traction – think CAVA – Dave’s unique product mix and edgier marketing should help it stand out, even amidst increased competition.
While many discretionary retail categories – including consumer electronics, sporting goods, home improvement, and furniture – are still waiting for post-pandemic demand to recover, housewares retailers have generally enjoyed solid visit trends in 2025. Although consumers may not be financially positioned for large-scale remodels, we are now five years past the pandemic, and many residents (many of whom still work from home) are looking to refresh their living spaces.
It may therefore come as no surprise that TJX Companies’ HomeGoods and Homesense brands had an exceptional 2025 and are well-positioned to repeat this success in 2026.
This year, we observed a behavioral shift among middle-income consumers, including a clear “trade down” from mid-tier department stores and other discretionary categories. In addition, accumulated housing wear-and-tear, the recent bankruptcies of value-oriented competitors such as Conn’s and At Home, and the enduring appeal of the treasure hunt retail model, have all reinforced the brands’ momentum. Taken together, these trends leave HomeGoods and Homesense poised for both continued unit growth and increased traffic in the year ahead.
With the heightened emphasis on health and wellness post-pandemic, fitness is proving to be a category with remarkable staying power well beyond New Year’s resolution season – even in an era of macroeconomic uncertainty. Whether it’s pumping iron, hitting the treadmill, or joining fitness classes, staying healthy no longer requires breaking the bank – for just a dollar a day or less, gymgoers can build strength and endurance, achieve their rep goals, and hit their mileage targets. And affordable fitness chains – those that charge less than $30 per month – are reaping the benefits, outperforming more expensive gyms for YoY visit growth.
Among this value-oriented fitness cohort, EōS saw outsized traffic growth in 2025, with both overall visits and average visits per location outpacing competitors as the chain expands its footprint. EōS’s motto, “High Value, Low Price,” appears to be resonating strongly – especially in a year when similar value propositions are driving momentum across off-price retailers, value grocers, and dollar stores. Longer-than-average dwell times at EōS provide another encouraging signal, suggesting that its amenities, including pools, saunas, basketball courts, and equipment assortments typically found in higher-priced gyms, are truly connecting with visitors. And since visitors who stay longer are more likely to return – and to renew their memberships – EōS is well-positioned to convert this year’s traffic gains into lasting market share.
Eating and entertainment are a match made in heaven — and by leaning into a subscription model that meets price-sensitive customers where they are, Chuck E. Cheese has solidified its position as a standout in the eatertainment category.
Nearly 50 years old, this evergreen children’s entertainment concept has stood the test of time and now boasts roughly 500 venues nationwide. Its perennial tagline – “where a kid can be a kid” – still resonates with today’s children and with the parents who grew up with the brand. After languishing for several years in the wake of COVID, the company turned things around with a revamped Summer Fun Pass launched on April 30th, 2024. The offer of unlimited play per month sparked a dramatic boost in customer loyalty, and the model proved so successful that the company extended it year-round with a family pass as low as $7.99 per month.
This strategy has helped sustain visit growth throughout 2025. Despite closing several locations during the year, visits to Chuck E. Cheese rose 8.3% YoY – well above the flat eatertainment average. And the company’s loyalty rates outpaced last year from August through November, indicating that the offering isn’t losing steam and that customers continue to respond enthusiastically.
The diversity of brands featured in this report highlights that there is no single path to success in 2026.
H-E-B and Chuck E. Cheese demonstrate the power of deepening loyalty through authentic experiences and value-driven memberships. Michaels and HomeGoods show how savvy retailers can capitalize on competitor consolidation and changing consumer spending habits. Meanwhile, Walmart and 7 Brew prove that even in saturated markets, operational innovation can drive fresh momentum.
As we move deeper into 2026, the brands that win will be those that, like the ten profiled here, combine a clear understanding of their unique value proposition with the agility to execute on it.
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Coffee’s success in 2025 offers several key lessons for dining operators across categories:
1. Strategic expansion into under-penetrated regions can supercharge growth. YoY visits to coffee chains are growing fastest in areas of the Southeast and Sunbelt where the category still accounts for a relatively low share of dining visits.
2. Pairing craveable products with genuinely human, personalized service can build durable loyalty. Aroma Joe’s proves that when standout offerings are combined with warm, consistent personal touches, brands can create habit loops that drive repeat visits even in crowded markets.
3. Prioritizing hyper-efficient convenience models can unlock meaningful growth. Scooter’s Coffee demonstrates that fast, reliable, frictionless experiences can materially increase traffic while supporting rapid expansion.
4. Building recurring limited-time rituals can create predictable demand spikes and deepen engagement. From the annual Pumpkin Spice Latte launch to Jackpot Day, coffee chains show that ritualized promotions can “own the calendar,” generating predictable traffic spikes and deepening emotional engagement.
5. Using scarce, hype-driven offerings can generate high-impact moments that shift behavior. Starbucks’ Bearista drop illustrates how limited, buzzworthy merchandise or products can not only spike visits but also shift customer behavior, driving traffic outside typical dayparts.
6. Leveraging cultural collaborations can create excitement without relying on discounts. Dunkin’s Wicked partnership shows that tapping into moments in pop culture can deliver multi-day visit lifts comparable to major promotions – often without relying on giveaways.
Coffee has become one of the most resilient and inventive corners of the U.S. food and beverage industry. Even as consumers wrestle with higher prices and trim discretionary spending, they continue to show up for cold foam, caffeinated boosts, and treat-worthy daily indulgences.
Throughout 2025, coffee chains saw consistent year-over-year (YoY) quarterly visit growth, as brands from Starbucks to 7 Brew expanded their footprints. Crucially, per-location category-wide traffic also remained close to 2024 levels throughout most of the year before trending upward heading into the holiday season – showing that this expansion has not diluted demand at existing coffee shop locations.
What’s fueling coffee’s ongoing momentum? Which strategies are helping leading chains accelerate despite this year’s headwinds? And what can operators across dining categories learn from coffee’s success?
This white paper dives into the data to reveal the strategies behind coffee’s standout performance – and how they can help dining concepts across segments succeed in 2026.
Analyzing market-level (DMA) dining traffic data reveals that coffee chains are prioritizing growth in markets with lighter competition – and this formula is paying off.
In the graphic below, the top map shows the share of dining visits commanded by coffee in each DMA, while the bottom map highlights the year-over-year (YoY) change in visits to the coffee category. Perhaps unsurprisingly, markets where coffee already commands a high share of dining visits (specifically on the West Coast and in the Northeast) are seeing the softest year-over-year performance, while DMAs with lower coffee penetration are delivering the strongest visit growth.
In other words, traditional coffee markets such as Northwestern metros– where competition is high and incremental gains are harder to capture – are no longer the primary engines of category momentum. Instead, coffee visits are growing fastest across the Southeast, Sun Belt, and Texas – regions where branded coffee still represents a relatively small share of dining visits. Operators across dining segments can learn from coffee's approach and identify markets with low category penetration to lean into those whitespace opportunities.
But geography is only part of the story. And the coffee segment shows that a strong concept that delivers on fundamentals – great products and exceptional service – can thrive even in tougher coffee markets such as the northeast.
The experience of expanding Northeastern chain Aroma Joe’s shows how pairing craveable beverages with an unusually personal service model can drive visit growth even in relatively hard-to-break-into regions.
Aroma Joe’s, a rapidly-expanding coffee chain headquartered in Maine, with over 125 locations, has become something of a local obsession: Customers rave about the chain’s addictive signature beverages – as well as the feel-good atmosphere cultivated by its warm, friendly staff. And this combination of human touch and product quality creates a powerful habit loop: In October 2025, nearly one quarter of visitors to Aroma Joe’s stopped at the chain at least four times during the month – a much higher loyalty rate than that seen by other leading coffee brands.
The takeaway: Craveable products paired with exceptional service can create a scalable loyalty engine.
Another key differentiator for the coffee sector is convenience. Drive-thrus have become ubiquitous across the category, with many of the fastest-growing upstarts embracing drive-thru only models and legacy leaders also leaning more heavily into the format.
Scooter’s Coffee – named for its core promise to help customers “scoot” in and out quickly – exemplifies this advantage. In Q3 2025, the chain posted a 3.1% YoY increase in average visits per location, even as it continued to scale its footprint. And its customers averaged a dwell time of just 7.3 minutes – significantly lower than other leading coffee chains, including other drive-thru-forward peers.
By delivering consistently quick experiences without compromising quality, Scooter’s has emerged as a traffic leader in the coffee space – demonstrating the power of efficiency to drive demand.
No category has mastered the “event-ization” of the menu quite like coffee – and few brands own the category’s calendar as effectively as Starbucks. The annual return of the Pumpkin Spice Latte has become a cultural milestone that marks the unofficial start of fall for millions, driving double-digit visit spikes and shaping seasonal traffic patterns.
And the importance of the event only continues to grow. On August 26th, 2025, PSL day drove a 19.5% spike in traffic compared to the prior ten-week average – a higher relative spike than that seen in 2024 or 2023.
But this playbook isn’t reserved for mega-brands. 7 Brew’s monthly Jackpot Day, held on the 7th of each month, shows how recurring promotions can also build anticipation and deliver repeatable traffic lifts for up-and-coming concepts.
Beginning in August 2025, Jackpot Day shifted from a limited “Jackpot Hour” to an all-day activation. That month’s offer – two medium drinks for $8 plus a Kindness wristband – generated a 47.1% lift versus an average Thursday. And in subsequent months, giveaways ranging from tote bags to footballs kept the excitement going, sustaining elevated visits each time the 7th rolled around.
These rituals create emotional consistency: Customers know when to expect something special and plan around it. Dining chains beyond the coffee space can also create dependable spikes in traffic by implementing recurring, ritualized LTOs that create an emotional calendar and keep customers engaged.
Offering recurring LTOs is one way to keep customers consistently engaged. But one-time, limited-edition merch drops can create even bigger visit surges. Starbucks’ much-hyped “Bearista” launch this November is a prime example: Customers lined up nationwide for the chance to buy – not receive – an adorable, limited-edition, bear-shaped reusable cup. And despite its hefty $30 price tag, the merch drop drove a massive nationwide visit spike, making it the chain’s biggest sales day ever and fueling additional momentum leading into Red Cup Day.
And location data shows that this kind of hype-driven, scarce merchandise can shift not just visitor volume but daypart behavior. Visits surged as early as 4:00 AM as FOMO-driven customers showed up at the crack of dawn to secure a bear. And the shift toward early morning visits (though not quite as early) continued the following day as stores quickly ran out of stock.
Starbucks' Bearista frenzy suggests that scarcity isn’t just a retail tactic – it’s a powerful behavioral trigger that restaurants can harness as well. Limited-run items, exclusive merch drops, or time-bound specials can generate excitement, pull visits forward, and reshape daypart patterns in ways traditional promotions rarely do.
Cultural tie-ins add another accelerant. In November, Dunkin’ launched its Wicked collaboration alongside its holiday menu, generating a significant multi-day traffic spike – achieved, like Bearista, without giveaways. The event leaned on playful thematic branding, seasonal flavors, and limited-run items that tapped into Wicked fandom.
Dunkin's Wicked surge shows that when executed well, cultural relevance can also significantly move the needle. Other dining segments may also lean into thoughtful collabs to create outsized excitement and traffic lift – even without deep discounts or free offers.
The coffee sector’s 2025 performance offers a blueprint for dining success: Chains are expanding smartly into underpenetrated regions, successfully implementing both hyper-efficient and hyper-personal service models, using recurring LTOs to build seasonal and monthly rituals, and leveraging merch and pop culture partnerships to reshape demand.
Together, these strategies provide a practical playbook for dining brands to increase visit frequency, deepen customer commitment, and capture new growth opportunities in 2026 and beyond.
