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Sweetgreen and First Watch both went public in 2021 and have since steadily increased in popularity – and in store count. So with 2024 well underway, we checked in with the two brands to see how they fared in Q1 and to explore some of the factors underlying their success.
Despite the dining challenges of much of 2023 and early 2024, sweetgreen posted impressive visits between April 2023 and March 2024, with the chain’s YoY traffic increases ranging from 21.4% to 51.6%.
The remarkable visit surge was partially driven by the sweetgreen’s significant expansion, which could explain the slight dips in average visits per location for much of 2023 while consumers around sweetgreen’s newer restaurantes familiarized themselves with the brand’s offerings. But since December 2023, YoY visits per location have been positive – with the exception of a weather-induced slump in January – indicating that the chain’s newer venues have established themselves within their community.
This narrowing of the gap between visits and visits per location may also signal the success of sweetgreen’s strategic shift towards prioritizing "quality over quantity” – slowing down expansion and investing in an enhanced customer experience.
As a salad and grain-bowl chain, sweetgreen holds special appeal for wellness-focused younger consumers, including singles and members of the coveted Gen Z demographic. But as the chain has expanded, it has also succeeded in reaching new audiences.
Sweetgreen has been explicit about its goal of reaching Gen Z consumers. And analyzing the demographic makeup of the chain’s captured market reveals that sweetgreen’s trade area includes a relatively large share of one-person households (that tend to be on the younger side) But analyzing shifts in the chain’s captured market composition over the past five years also reveals that the share of one-person households has been decreasing – while remaining above the nationwide average of 28.0% – and the share of households with children has increased. So even as sweetgreen continues serving its core consumers, the chain’s expansion has also allowed sweetgreen to reach new audiences.
First Watch is also in expansion mode, and with plans to open some 50 more restaurants this year the chain shows no signs of slowing down. And, like sweetgreen, First Watch’s expansion has driven significant growth to the chain’s overall visits – and the chain’s average visits per location numbers are up as well, indicating that the new venues are finding a receptive audience.
By staying nimble on its feet and continually changing up its menu offerings, First Watch has succeeded in differentiating itself from other breakfast chain giants – and appears poised to enjoy continued success throughout the year.
First Watch’s expansion has also helped the company reach new types of diners even as the chain continues catering to its core audience. The share of the Spatial.ai: PersonaLive’s “Upper Suburban Diverse Families” segment in First Watch’s captured market has held steady over the past five years, even as the share of the “Blue Collar Suburbs” and “Urban Low Income” segments increased. It seems, then, that First Watch has also succeeded in leveraging its store fleet expansion to reach new audience segments – without sacrificing its core patrons.
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Sweetgreen and First Watch’s expansions have helped the companies increase visits and reach new segments – without sacrificing their core audiences. What does the rest of 2024 have in store for the chains?
Visit our blog at placer.ai to find out.
Dining took a hit over the past few years, with major challenges from COVID to rising costs weighing on the category. And perhaps no food-away-from-home segment was more impacted than Full Service Restaurants (FSR) – which stagnated as consumers traded down and sought out more affordable ways to treat themselves.
But new years present new opportunities – and there are signs that sit-down restaurants may be springing back to life. So with 2024 underway, we dove into the data to explore the current state of FSR. Is cooling inflation prompting a rise in Full Service Restaurant activity? How did FSR leaders like Dine Brands (owner of casual dining favorites Applebee’s and IHOP), Bloomin’ Brands (owner of popular grill and steak chains like Outback Steakhouse and Carrabba’s Italian Grill along with high-end Fleming’s Prime Steakhouse & Wine Bar), and Texas Roadhouse fare in Q1?
With some 1500 locations nationwide, Applebee’s has long been a mainstay of the American casual dining scene. Like other FSR chains, Applebee’s experienced a setback during the pandemic and has since faced industry-wide headwinds. But even though the brand’s store fleet shrunk by around 30 stores last year, overall YoY visits to Applebee’s declined just slightly between October 2023 and February 2024 (January’s weather-driven slump aside). And in March, the chain saw a promising 3.8% YoY visit uptick.
Breakfast leader IHOP also experienced negative YoY visits in October and November 2023, but in December – when the pancake chain traditionally enjoys a major holiday boost – visits jumped 2.8% YoY. Like Applebee’s, IHOP felt the effects of January’s Arctic blast, but saw its visits recover quickly in February and March 2024.
Bloomin’ Brands’ leading casual dining chains Outback Steakhouse, Carrabba’s Italian Grill, and Bonefish Grill appear to be following largely similar trajectories.
Though the brands experienced YoY visit gaps through most of Q3 2023 – and were whalloped by January’s inclement weather – all three chains experienced YoY visit increases in March 2024. Given the fact that the restaurants’ store counts didn’t change significantly last year, this visit growth appears to portend good things for Bloomin’s fast casual portfolio in the year ahead.
But it is Bloomin’ Brands’ fine dining concept, Fleming’s Prime Steakhouse & Wine Bar, that really seems to be hitting it out of the park. While Fleming’s also saw visit gaps between October 2023 and January 2024, the chain experienced 9.6% and 7.5% visit growth, respectively, in February and March 2024 – closing out Q1 with a bang.
Fleming’s particularly robust recent performance may be due in part to its relatively affluent customer base. Nearly one-third of households in Fleming’s captured market have an annual income of $150K or more – compared to just 18.6% to 23.7% for Bloomin’s casual dining concepts. Though a night out at the fine-dining steakhouse can be expensive, Fleming’s well-heeled visitor base is better positioned to absorb price increases than other consumers.
Appealing to affluent consumers, however, isn’t the only way to go. Texas Roadhouse is firmly in the casual dining space and tends to cater to average-income diners. (In Q1 2024, just 15.2% of its captured market had a household income ≥$150K.) But the steakhouse’s strategy of satisfying steak lovers with high-quality, affordable offerings is working: Throughout Q1, Texas Roadhouse experienced strongly positive YoY visit growth. And while some of this growth is attributable to the brand’s increasing unit count, the average number of visits per location is generally keeping pace – showing that Texas Roadhouse’s expansion continues to meet strong demand.
Though more affordable Dining segments like QSR and Fast Casual began to spring back to life last year, FSR has yet to fully recover from the double whammy of COVID and inflation. But if March 2024’s promising numbers are any indication, the category may be in for a turnaround. How will FSR continue to perform as 2024 progresses?
Follow Placer.ai’s Dining deep dives to find out.
Restaurants continue to face headwinds, from still-high food-away-from-home prices to rising labor costs. But despite these challenges, there are promising signs that the industry may be in for an upturn. And increasingly, chains are leaning into breakfast and late night offerings to maximize revenue and foster customer loyalty.
So with Q1 2024 under our belts, we checked in with Wendy’s and Denny’s, two dining leaders with very different offerings in the breakfast space. How did they weather the first quarter of 2024 (pun intended)? And which dayparts experienced the biggest visit boosts in Q1?
After a tough Q4 2023 – and a January 2024 dragged down by cold and stormy weather – YoY visits to Wendy’s and Denny’s began to pick up in February and March 2024. And even accounting for January’s Arctic blast, Wendy’s and Denny’s came out ahead on a quarterly basis, with YoY visits up 0.7% and 1.0% respectively.
Wendy’s first launched its breakfast menu in March 2020, just before COVID sent the dining industry into a tailspin. But despite a rocky start, Wendy’s doubled down on the morning daypart, continually tweaking its breakfast offerings and investing ad dollars to boost breakfast sales.
Drilling down into hourly visit data shows that this strategy is paying off. Visits to Wendy’s during the morning daypart (between 6:00 AM and 11:00 AM) jumped 9.3% in Q1 2024 compared to Q1 2023. The chain’s nighttime daypart – which the burger giant began advertising in 2023 for the first time in four years – also saw a YoY boost. Meanwhile, Wendy’s traditional lunch and dinner time slots held steady, with just minor quarterly visit gaps, indicating that the chain’s overall YoY visit growth in Q1 was driven by its breakfast and nighttime push.
Denny’s has always been all about breakfast. And with some 75.0% of Denny’s locations open 24/7 (even on Christmas), hungry diners frequent the chain day and night to satisfy their cravings for hash browns, eggs, pancakes, and other breakfast favorites.
Unsurprisingly, the chain gets most of its visits in the morning and early afternoon. But in Q1 2024, it was the late night daypart that experienced the biggest YoY visit bump – perhaps driven in part by Denny’s push last year to increase the number of locations open in the wee hours.
But Denny’s busiest time slot, between 11:00 AM and 3:00 PM, also experienced a YoY visit increase – showing that even as the chain cements its role as a go-to nighttime destination, it continues to face healthy demand during more traditional dining dayparts.
Breakfast and late night dining offerings have emerged as important drivers of dining success. How will these dayparts continue to fare as the year wears on? And which other brands will make inroads into the breakfast and nighttime dining game?
Follow Placer.ai’s data-driven dining analyses to find out.
At a time when retail loyalty appears to be low, warehouse clubs remain the exception. Bulk is big business in the U.S. retail market, and clubs have found a way to deliver on a combination of value, convenience and experience, and sometimes $1.50 hot dogs. The allure of the warehouse club defies some current consumer logic; U.S. households are not growing according to the U.S. Census Bureau. But, clubs also represent much of what is good in retail today: a broad combination of goods and services, inherent value and high quality private labels.
These factors have aided warehouses in growing store traffic compared to their mass merchant counterparts, particularly in the first quarter of 2024. Clubs--including BJ’s Wholesale Club, Sam’s Club and Costco Wholesale--saw visits increase by almost 8% year-over-year, almost double the combined growth of Walmart and Target during the same period. Mass merchants have been squeezed by other value sectors, clubs have been able to hold their own and continue to provide “perceived” value to shoppers, contributing to their traffic volumes.
Beneath the umbrella of growth, each chain has some surprising competitive advantages, and it’s clear that each club serves a distinct purpose to its visitors. In reviewing daily visits, Sam’s Club owns Saturdays, with 22% of visits occurring that day (as shown below), the highest percentage of visits compared to its competition. In contrast, Costco sees a higher percentage of visits on weekdays, specifically Tuesday through Thursday, compared to the other chains.
While Sam’s Club and Costco stand out in terms of their daily visits, BJ’s excels in the time of day that it attracts higher levels of visitors to its locations. BJ’s draws 7% of visits between 8:00-10:00 AM (show below), which is two points higher than Sam’s Club and more than double Costco’s percentage of visits. Not only does BJ’s attract the morning shopper, but also the afterhours customer. BJ’s over indexes in the percentage of visits between 7:00-10:00 PM, with almost 11% of visits occurring during those later hours. BJ’s locations tend to open earlier and stay open later than their Sam’s Club and Costco counterparts, which vary in operational hours for the clubs themselves outside of gas stations. This creates a distinct advantage for BJ’s, especially in areas of direct competition, as visitors looking to shop at off-hours are likely to visit BJ’s.
It’s clear that each club chain has its key day and time to attract visitors that doesn’t overlap too much with its competitors. Warehouse clubs are doing a fantastic job at meeting their consumers where they are and when they prefer to shop. Clubs benefit from increased loyalty due to membership, but it appears that visitors flock to these clubs no matter the day or time. Maybe it’s time to bring breakfast to the Costco & Sam’s Club food courts?
Arrowhead Towne Centre in Glendale, AZ recently opened the newest family fun entertainment center with both a ROUND1 Bowling & Arcade as well as a Spo-Cha. Taking over an erstwhile Mervyn’s, the former includes eight bowling lanes, a variety of favorite games like a claw machine, and two party/karaoke rooms. Upstairs is Spo-Cha, short for Sports Challenge, which is an indoor sports complex where one pays a flat fee for 90 minutes to access activities like riding a mechanical bull, batting cages, a trampoline park, basketball, different sport courts, and billiards.
Spo-Cha is currently in five mall locations in the United States, with plans for more. Overall foot traffic at the malls where it’s currently operational has been positive year-over-year for the month of March.
In addition to the mechanical bull, there is also a Kids Spo-Cha climbing gym and obstacle course.
Source: Spo-Cha
Source: Spo-Cha
At an overall chain level, Round1 Entertainment tends to attract Near Urban Diverse Families and Wealthy Suburban Families the most.
Pandemic restrictions ushered in a new age of remote work that slashed commuting and office-wide coffee orders. But the coffee space has adapted to changing consumer behavior, and category leaders – Starbucks, Dunkin’, and Dutch Bros. Coffee – have found success in the new normal.
With Q1 2024 in the rearview mirror, we took a closer look at how visitation to the coffee space has changed since the pandemic.
Over the last few years, Starbucks, Dunkin’, and Dutch Bros have expanded their footprints, helping drive visits in a turbulent retail environment. Notably, visits to all three chains have remained above pre-pandemic levels nearly every quarter since Q2 2021, signifying a rapid and robust foot traffic recovery for the space.
Starbucks and Dunkin’ have both implemented expansion plans recently, with Starbucks focusing on smaller-format stores and Dunkin’ going after non-traditional sites such as airports, universities, and travel plazas. The store fleet growth likely contributed to both chains’ visit increases – in Q1 2024, foot traffic to Starbucks and Dunkin’s was up 14.5% and 9.5%, respectively, compared to Q1 2019.
Meanwhile Dutch Bros.’ physical footprint has grown exponentially since 2019, and the chain is now working on developing its digital footprint, including the rollout of mobile ordering.The company’s aggressive expansion contributed to Dutch Bros.’ significantly elevated visits in Q1 2024 – 177.6% above the Q1 2019 baseline. (The chain’s considerably larger year-over-five-year visit increases compared to Starbucks and Dunkin’ can be attributed to Dutch Bros.’ substantially smaller starting footprint, so that every opening brings a larger visit boost to the chain as a whole.)
Zooming in on visits since the halfway point of 2023 shows that the coffee space’s post-pandemic momentum continued in recent months, with year-over-year (YoY) monthly visits to all three chains positive since the beginning of 2024.
Dutch Bros.’ ongoing aggressive expansion once again gave the Oregon-based chain the largest year-over-year boost, and Starbucks and Dunkin’ also sustained YoY visit growth nearly every month.
Each Coffee Brand Fills a Different Need
The visit growth for the three coffee leaders analyzed shows that there is enough consumer demand to support across-the-board growth in the space. And analyzing the Q1 2024 hourly visit distribution for Starbucks, Dunkin’, and Dutch Bros. reveals that visits to each chain follow a unique pattern – suggesting that every brand plays a unique role in the wider coffee landscape.
Dunkin’ received almost half (47.8%) of its visits before 11:00 AM, indicating that many guests visit Dunkin’ primarily for coffee or other breakfast fare. Starbucks’s guests tended to visit a little later in the day – with 38.5% of Starbucks visits taking place between 11:00 AM and 3:59 PM – so many consumers may be visiting the Seattle-based chain for a midday pick-me-up. Meanwhile, Dutch Bros. saw the largest share of late afternoon and evening visits (between 4:00 and 10:59 PM) relative to the other two chains – perhaps thanks to the chain’s wide variety of non-caffeinated beverages.
The variance in the hourly visit distribution between the three chains shows that the coffee space is big enough for multiple players and bodes well for the three chains’ performance in 2024.
For more data-driven pick-me-ups, visit 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.
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1) Value Wins in 2025: Discount & Dollar Stores and Off-Price Apparel are outperforming as consumers prioritize value and the “treasure-hunt” experience.
2) Small Splurges Over Big Projects: Clothing and Home Furnishing traffic remains strong as shoppers favor accessible wardrobe updates and decor refreshes instead of major renovations.
3) Big-Ticket Weakness: Electronics and Home Improvement visits continue to lag, reflecting a continued deferment of larger purchases.
4) Bifurcation in Apparel: Visits to off-price and luxury segments are growing, while general apparel, athleisure, and department stores face ongoing pressures from consumer trade-downs.
5) Income Dynamics Shape Apparel: Higher-income shoppers sustain luxury and athleisure, while off-price is driving traffic from more lower-income consumers.
6) Beauty Normalizes but Stays Relevant: After a pandemic-driven surge, YoY declines likely indicate that beauty visits are stabilizing; shorter trips are giving way to longer visits as retailers deploy new tech and immersive experiences.
Economic headwinds, including tariffs and higher everyday costs, are limiting discretionary budgets and prompting consumers to make more selective choices about where they spend. But despite these pressures, foot traffic to several discretionary retail categories continues to thrive year-over-year (YoY).
Of the discretionary categories analyzed, fitness and apparel had the strongest year-over-year traffic trends – likely thanks to consumers finding perceived value in these segments.
Fitness and apparel (boosted by off-price) appeal to value-driven, experience seeking consumers – fitness thanks to its membership model of unlimited visits for an often low fee, and off-price with its discount prices and treasure-hunt dynamic. Both categories may also be riding a cultural wave tied to the growing use of GLP-1s, as more consumers pursue fitness goals and refresh their wardrobes to match changing lifestyles and sizes.
Big-ticket categories, including electronics, also faced significant challenges, as tighter consumer budgets hamper growth in the space. Traffic to home improvement retailers also generally declined, as lagging home sales and consumers putting off costly renovations likely contributed to the softness in the space.
But home furnishing visits pulled ahead in July and August 2025 – benefitting from strong performances at discount chains such as HomeGoods – suggesting that consumers are directing their home-oriented spending towards more accessible decor.
The beauty sector – typically a resilient "affordable luxury" category – also experienced declines in recent months. The slowdown can be partially attributed to stabilization following several years of intense growth, but it may also mean that consumers are simplifying their beauty routines or shifting their beauty buying online.
> Traffic to fitness and apparel chains – led by off-price – continued to grow YoY in 2025, as value and experiences continue to draw consumers.
> Consumers are shopping for accessible home decor upgrades to refresh their space rather than undertaking major renovations.
> Shoppers are holding off on big-ticket purchases, leading to YoY declines in the electronics and home improvement categories.
> Beauty has experienced softening traffic trends as the sector stabilizes following its recent years of hypergrowth as shoppers simplify routines and shift some of their spending online.
After two years of visit declines, the Home Furnishings category rebounded in 2025, with visits up 4.9% YoY between January and August. By contrast, Home Improvement continued its multi-year downward trend, though the pace of decline appears to have slowed.
So what’s fueling Home Furnishings’ resurgence while Home Improvement visits remain soft? Probably a combination of factors, including a more affluent shopper base and a product mix that includes a variety of lower-ticket items.
On the audience side, this category draws a much larger share of visits from suburban and urban areas, with a median household income well above that of home improvement shoppers. The differences are especially pronounced when analyzing the audience in their captured markets – indicating that the gap stems not just from store locations, but from meaningful differences in the types of consumers each category attracts.
Home improvement's larger share of rural visits is not accidental – home improvement leaders have been intentionally expanding into smaller markets for a while. But while betting on rural markets is likely to pay off down the line, home improvement may continue to face headwinds in the near future as its rural shopper base grapples with fewer discretionary dollars.
On the merchandise side, home improvement chains cater to larger renovations and higher-cost projects – and have likely been impacted by the slowdown in larger-ticket purchases which is also impacting the electronics space. Meanwhile, home furnishing chains carry a large assortment of lower-ticket items, including home decor, accessories, and tableware.
Consumers are still spending more time at home now than they were pre-COVID, and investing in comfortable living spaces is more important than ever. And although many high-income consumers are also tightening their belts, upgrading tableware or even a piece of furniture is still much cheaper than undertaking a renovation – which could explain the differences in traffic trends.
Traditional apparel, mid-tier department stores, and activewear chains all experienced similar levels of YoY traffic declines in 2025 YTD, as shown in the graph above. But analyzing traffic data from 2021 shows that each segment's dip is part of a trajectory unique to that segment.
Traffic to mid-tier department stores has been trending downward since 2021, a shift tied not only to macroeconomic headwinds but also to structural changes in the sector. The pandemic accelerated e-commerce adoption, hitting department stores particularly hard as consumers seeking one-stop shopping and broad assortments increasingly turned to the convenience of online channels.
Traffic to traditional apparel chains has also not fully recovered from the pandemic, but the segment did consistently outperform mid-tier department stores and luxury retailers between 2021 and 2024. But in H1 2025, the dynamic with luxury shifted, so that traffic trends at luxury apparel retailers are now stronger than at traditional apparel both YoY and compared to Q1 2019. This highlights the current bifurcation of consumer spending also in the apparel space, as luxury and off-price segments outperform mid-market chains.
In contrast, the activewear & athleisure category continues to outperform its pre-pandemic baseline, despite experiencing a slight YoY softening in 2025 as consumers tighten their budgets. The category has capitalized on post-lockdown lifestyle shifts, and comfort-driven wardrobes that blur the line between work, fitness, and leisure remain entrenched consumer staples several years on.
The two segments with the highest YoY growth – off-price and luxury – are at the two ends of the spectrum in terms of household income levels, highlighting the bifurcation that has characterized much of the retail space in 2025. And luxury and off-price are also benefiting from larger consumer trends that are boosting performance at both premium and value-focused retailers.
In-store traffic behavior reveals that these two segments enjoy the longest average dwell times in the apparel category, with an average visit to a luxury or off-price retailer lasting 39.2 and 41.3 minutes, respectively. This suggests that consumers are drawn to the experiential aspect of both segments – treasure hunting at off-price chains or indulging in a sense of prestige at a luxury retailer. Together, these patterns highlight that – despite appealing to different consumer groups – both ends of the market are thriving by offering shopping experiences that foster longer engagement.
> Off-price and luxury segments are outperforming, while general apparel, athleisure, and department store visits lag YoY under tariff pressures and consumer trade-downs.
> Looking over the longer term reveals that athleisure is still far ahead of its pre-pandemic baseline – even if YoY demand has softened.
> Luxury and off-price both are thriving by offering shopping experiences that foster longer engagement.
The beauty sector has long benefitted from the “lipstick effect” — the tendency for consumers to indulge in small luxuries even when discretionary spending is constrained. And while the beauty category’s softening in today’s cautious spending environment could suggest that this effect has weakened, a longer view of the data tells a more nuanced story.
Beauty visits grew significantly between 2021 and 2024, fueled by a confluence of factors including post-pandemic “revenge shopping,” demand for bolder looks as consumers returned to social life, and new store openings and retail partnerships. Against that backdrop, recent YoY traffic dips are likely a sign of stabilization rather than true declines. Social commerce, and minimalist skincare routines may be moderating in-store traffic, but shoppers are still engaged, even as they blend online and offline shopping or seek out lower-cost alternatives to maximize value.
Analysis of average visit duration for three leading beauty chains – Ulta Beauty, Bath & Body Works, and Sally Beauty Supply – highlights the shifting role but continued relevance of physical stores in the space.
Average visit duration decreased post-pandemic – likely due to more purposeful trips and increased online product discovery. But that trend began to reverse in H1 2025, signaling the changing role of physical stores. Enhanced tech for in-store product exploration and rich experiences may be helping drive deeper engagement, underscoring beauty retail’s staying power even in a more measured spending environment.
Bottom Line:
> Beauty’s slight YoY visit declines point to a period of normalization following a post-pandemic boom, while longer-term trends show the category remains stronger than pre-pandemic levels.
> Visits grew shorter post-pandemic, driven by more purposeful trips and increased online product discovery – but dwell time is now lengthening again, signaling renewed in-store engagement driven by tech-enabled discovery and immersive experiences.
Foot traffic data highlight major differences in the recent performance of various discretionary apparel categories. Off-price, fitness, and home furnishings are pulling ahead, well-positioned to keep capitalizing on shifting priorities. Luxury also remains resilient, likely thanks to its higher-income visitor base.
At the same time, beauty’s normalization and the slowdown in mid-tier apparel, electronics, and home improvement show that caution persists across discretionary budgets. Moving forward, retailers that align with consumers’ demand for value, accessible upgrades, and immersive experiences may be best placed to thrive in this era of selective spending.
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1) Broad-based growth: All four grocery formats grew year-over-year in Q2 2025, with traditional grocers posting their first rebound since early 2024.
2) Value grocers slow: After leading during the 2022–24 trade-down wave, value grocer growth has decelerated as that shift matures.
3) Fresh formats surge: Now the fastest-growing segment, fueled by affluent shoppers seeking health, wellness, and convenience.
4) Bifurcation widens: Growth concentrated at both the low-income (value) and high-income (fresh) ends, highlighting polarized spending.
5) Shopping missions diverge: Short trips are rising, supporting fresh formats, while traditional grocers retain loyal stock-up customers and value chains capture fill-in trips through private labels.
6) Traditional grocers adapt: H-E-B and Harris Teeter outperformed by tailoring strategies to their core geographies and demographics.Bifurcation of Consumer Spending Help Fresh Format Lead Grocery Growth
Grocery traffic across all four major categories – value grocers, fresh format, traditional grocery, ethnic grocers – was up year over year in Q2 2025 as shoppers continue to engage with a wide range of grocery formats. Traditional grocery posted its first YoY traffic increase since Q1 2024, while ethnic grocers maintained their steady pattern of modest but consistent gains.
Value grocers, which dominated growth through most of 2024 as shoppers prioritized affordability, continued to expand but have now ceded leadership to fresh-format grocers. Rising food costs between 2022 and 2024 drove many consumers to chains like Aldi and Lidl, but much of this “trade-down” movement has already occurred. Although price sensitivity still shapes consumer choices – keeping the value segment on an upward trajectory – its growth momentum has slowed, making it less of a driver for the overall sector.
Fresh-format grocers have now taken the lead, posting the strongest YoY traffic gains of any category in 2025. This segment, anchored by players like Sprouts, appeals to the highest-income households of the four categories, signaling a growing influence of affluent shoppers on the competitive grocery landscape. Despite accounting for just 7.0% of total grocery visits in H1 2025, the segment’s rapid gains point to a broader shift: premium brands emphasizing health and wellness are emerging as the primary engine of growth in the grocery sector.
The fact that value grocers and fresh-format grocers – segments with the lowest and highest median household incomes among their customer bases – are the two categories driving the most growth underscores how the bifurcation of consumer spending is playing out in the grocery space as well. On one end, price-sensitive shoppers continue to seek out affordable options, while on the other, affluent consumers are fueling demand for premium, health-oriented formats. This dual-track growth pattern highlights how widening economic divides are reshaping competitive dynamics in grocery retail.
1) Broad-based growth: All four grocery categories posted YoY traffic gains in Q2 2025.
2) Traditional grocery rebound: First YoY increase since Q1 2024.
3) Ethnic grocers: Continued steady but modest upward trend.
4) Value grocers: Still growing, but slowing after most trade-down activity already occurred (2022–24).
5) Fresh formats: Now the fastest-growing segment, driven by affluent shoppers and interest in health & wellness.
6) Market shift: Premium, health-oriented brands are becoming the new growth driver in grocery.
7) Bifurcation of spending: Growth at both value and fresh-format grocers highlights a polarization in consumer spending patterns that is reshaping grocery competition.
Over the past two years, short grocery trips (under 10 minutes) have grown far more quickly than longer visits. While they still make up less than one-quarter of all U.S. grocery trips, their steady expansion suggests this behavioral shift is here to stay and that its full impact on the industry has yet to be realized.
One format particularly aligned with this trend is the fresh-format grocer, where average dwell times are shorter than in other categories. Yet despite benefiting from the rise of convenience-driven shopping, fresh formats attract the smallest share of loyal visitors (4+ times per month). This indicates they are rarely used for a primary weekly shop. Instead, they capture supplemental trips from consumers looking for specific needs – unique items, high-quality produce, or a prepared meal – who also value the ability to get in and out quickly.
In contrast, leading traditional grocers like H-E-B and Kroger thrive on a classic supermarket model built around frequent, comprehensive shopping trips. With the highest share of loyal visitors (38.5% and 27.6% respectively), they command a reliable customer base coming for full grocery runs and taking time to fill their carts.
Value grocers follow a different, but equally effective playbook. Positioned as primary “fill-in” stores, they sit between traditional and fresh formats in both dwell time and visit frequency. Many rely on limited assortments and a heavy emphasis on private-label goods, encouraging shoppers to build larger baskets around basics and store brands. Still, the data suggests consumers reserve their main grocery hauls for traditional supermarkets with broader selections, while using value grocers to stretch budgets and stock up on essentials.
1) Short trips surge: Under-10-minute visits have grown fastest, signaling a lasting behavioral shift.
2) Fresh formats thrive on convenience: Small footprints, prepared foods, and specialty items align with quick missions.
3) Traditional grocers retain loyalty: Traditional grocers such as H-E-B and Kroger attract frequent, comprehensive stock-up trips.
4) Value grocers fill the middle ground: Limited assortments and private label drive larger baskets, but main hauls remain with traditional supermarkets.
5) Fresh formats as supplements: Fresh format grocers such as The Fresh Market capture quick, specialized trips rather than weekly shops.
While broad market trends favor value and fresh-format grocers, certain traditional grocers are proving that a tailored strategy is a powerful tool for success. In the first half of 2025, H-E-B and Harris Teeter significantly outperformed their category's modest 0.6% average year-over-year visit growth, posting impressive gains of 5.6% and 2.8%, respectively. Their success demonstrates that even in a polarizing environment, there is ample room for traditional formats to thrive by deeply understanding and catering to a specific target audience.
These two brands achieve their success with distinctly different, yet equally focused, demographic strategies. H-E-B, a Texas powerhouse, leans heavily into major metropolitan areas like Austin and San Antonio. This urban focus is clear, with 32.6% of its visitors coming from urban centers and their peripheries, far above the category average. Conversely, Harris Teeter has cultivated a strong following in suburban and satellite cities in the South Atlantic region, drawing a massive 78.3% of its traffic from these areas. This deliberate targeting shows that knowing your customer's geography and lifestyle remains a winning formula for growth.
1) Traditional grocers can still be competitive: H-E-B (+5.6% YoY) and Harris Teeter (+2.8% YoY) outpaced the category average of +0.6% in H1 2025.
2) H-E-B’s strategy: Strong urban focus, with 32.6% of traffic from major metro areas like Austin and San Antonio.
3) Harris Teeter’s strategy: Suburban and satellite city focus, with 78.3% of traffic from South Atlantic suburbs.
