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Limited-assortment value grocery stores like Aldi and Grocery Outlet Bargain Market have thrived in recent years, as inflation-wary consumers sought out ways to save money at the till.
But how are these chains faring in 2024? Have cooling inflation and increased consumer confidence put a dent in their performance? We dove into the data to find out.
As the name suggests, limited-assortment grocery stores are known for carrying fewer products than traditional grocery stores in a bid to cut down on overhead costs and pass savings on to consumers. These chains also utilize other methods, such as private label brands, opportunistic merchandising, and fewer in-store amenities, to keep prices low.
And foot traffic data shows that in the first part of 2024, consumers continued flocking to these brands to grab groceries at a discount – driving year-over-year (YoY) foot traffic growth that far outperformed that of traditional grocery stores. In May 2024, for example, visits to the overall grocery segment grew by 7.9% YoY, while Aldi and Grocery Outlet Bargain Market experienced YoY growth of 26.3%, 14.3%, and respectively.
Some of this foot traffic growth can be attributed to the two chains’ continued expansion: Aldi added dozens of new stores in 2023 – with hundreds more in the pipeline – and Grocery Outlet Bargain Market also significantly grew its footprint. But the average number of visits to both brands’ individual locations also increased, again outpacing traditional grocery, showing that their expansion is meeting robust demand.
Looking into the loyalty rates of visitors to these limited-assortment value chains provides more reason for optimism for the sector: Over the past three years, Aldi and Grocery Outlet Bargain Market both saw an increase in loyal visits – defined as those made by people who frequented the chains at least four times in a month.
In April 2022, for example, 28.0% of visits to Aldi and 27.0% of visits to Grocery Outlet Bargain Market were made by people who visited the chains at least four times during the month – but by 2024, these shares grew to 30.1% and 30.2%, respectively. A similar trend was observed in May 2024.
Increasingly, it seems, people are doing at least part of their routine weekly grocery shopping at these limited-assortment chains. And with consumers continuing to seek ways to save money, these grocers are well-positioned to continue growing their visit shares.
The limited-assortment, value grocery model continues to prove its staying power, with impressive foot traffic, visits per location, and loyalty rates.
Will the segment continue on its upward trajectory?
Visit Placer.ai to find out.
About the Placer 100 Index for Retail & Dining: The Placer 100 Index for Retail & Dining is a curated, dynamic list of leading chains that often serve as prime tenants for shopping centers and malls. The index includes chains from various industries, such as superstores, grocery, dollar stores, dining, apparel, and more. Among the notable chains featured are Walmart, Target, Costco, Kroger, Ulta Beauty, The Home Depot, McDonald’s, Chipotle, Crunch Fitness, and Trader Joe's. The goal of the list is to provide insight into the wider trends impacting the retail, dining, and shopping center segments.
Foot traffic patterns at leading chains can serve as an interesting proxy for consumer sentiment – offering a glimpse into the overall health of the retail and dining spaces. And analyzing the YoY foot traffic performance of the Placer 100 Index for Retail & Dining over the past twelve months reveals that, for the most part, major retail and dining players have enjoyed consistently strong visit growth. In November and December 2023 – during the height of last year’s holiday shopping season – foot traffic to the chains included in the Index increased 2.9% and 3.7% respectively, compared to the equivalent period of 2022.
And although 2024 opened with a slight, weather-driven YoY decline in visits, retail and dining foot traffic quickly bounced back, finishing out May with a 5.1% increase. This springtime jump was partly due to two special calendar days – Mother’s Day weekend, and Memorial Day weekend – both of which drove bigger visit spikes this year than in 2023.
These robust visitation patterns highlight consumer resilience in the face of headwinds – and may be an encouraging indicator of a thriving summer ahead.
Zooming into the Index’s regional performance during May 2024 uncovers impressive positive YoY visit growth across the nation.
The Midwest led the way, buoyed by strong YoY foot traffic growth in South Dakota (6.7%), Michigan (6.4%), and North Dakota (6.4%). But the two states with the biggest YoY visit boosts – Vermont (7.4%) and New Hampshire (7.0%) – were in the Northeast, and the South and West performed well too. This impressive increase in retail and dining visits was observed across the vast majority of the continental U.S., regardless of population size and local weather conditions. Such widespread growth indicates a robust and uniform recovery in consumer activity nationwide, suggesting that factors beyond regional characteristics, such as slowing inflation and increased consumer confidence, played a significant role in driving this trend.
Drilling down into the rankings of individual chains in the index can highlight some of the key trends shaping retail and dining this year.
Value-oriented retailers – including Aldi, Ollie’s Bargain Outlet, and Dollar General, – featured prominently among May’s top performers, both for YoY chain-wide visits and for YoY average visits per location. This robust showing demonstrates the continued draw of budget fare, which has been observed across a wide range of segments – from grocery to apparel.
The quest for savings spilled over into other segments as well. Value gym Crunch Fitness, which grew its footprint significantly over the past year, ranked among the top performers both for overall visits and for visits per location – showcasing the success of its expansion strategy. And casual dining chains Chili’s Grill & Bar and Buffalo Wild Wings also made the list, with YoY visit growth likely driven by successful value promotions.
Indeed, Chili's Grill & Bar – propelled by its hit Big Smasher Burger promotion – has emerged as this month's leading chain, topping the charts both for overall visits (26.3%) and for average visits per location (26.1%).
Hungry, budget-conscious diners can get Chili’s Big Smasher as part of the chain’s signature 3 for Me deal, which lets diners choose a beverage, starter, and main course starting at $10.99. And the offering, which was launched on April 29th, 2024, has become a sensation – going viral on TikTok and garnering significant media attention.
The promotion is competitively priced against QSR offerings, at a time when fast-food chains have seen slowing sales due to cutbacks by inflation-wary consumers. Chili's has been praised for delivering exceptional value – and taking a closer look at weekly visitation trends shows that this strategy is paying off. Chili’s saw a surge of weekly visit growth beginning the week of the promotion (April 29th), and has continued thriving since. This highlights the importance of understanding consumer needs and finding ways to deliver value.
Will June continue to see a rise in retail and dining visits as summer approaches? Will the success of retail and dining foot traffic remain evenly spread across regions, even as some areas are more affected by summer heat? And will value-oriented retailers continue to dominate the ten top performers in retail and dining?
Visit Placer.ai to find out.
It’s no secret that the restaurant category is starting to get more promotional. As consumers–especially lower income consumers–have shifted toward substitute food retail channels like value grocers, warehouse clubs, and convenience stores due to the compounded effect of food-away-from home inflation, restaurant chains across all tiers are resorting to increased promotional activity to drive visit trends.
Over the past few weeks, we’ve discussed that several casual dining chains had seen success through all-you-can eat and other deep discount promotions. Last week, we noted that Chili’s had been outperforming broader casual-dining category averages through its value messaging. We also noted the success of Buffalo Wild Wings All-You-Can Eat wings promotions on Monday and Wednesdays starting in mid-May. Below, we show visit trends to Buffalo Wild Wings on Mondays and Wednesdays compared to their year-to-date averages since the beginning of March. The promotion has helped to drive incremental visits on two traditionally slower days. During May, the chain was seeing visits greater than 30% its normal daily visit count for Mondays and Wednesdays during the earlier part of the promotion and exceeding 50% during the latter part of the month. While it's unlikely that this promotion will be permanent–restaurants have to work with their suppliers ahead of time to make sure they have sufficient food for promotions like this–but given the success, the chain may consider running during other months (and potentially other days of the week) later this year.
However, as we noted in our recap of this year’s National Restaurant Association show, QSR chains have started to get more promotional ahead as they look to recapture visit share lost to value grocers, dollar stores, and c-stores (especially within lower-income trade areas). McDonald’s will launch a national $5 value menu promotion on June 25, but it’s clear that other QSR chains are already seeing success with their competing $5 promotions. Below, we show year-over-year weekly visit trends from March through early June for the major QSR burger chains. Burger King launched its own $5 Your Way Meal value menu this past week, and has seen visit trends accelerate since then. Starbucks–which has historically stayed away from discounts as a way to protect its premium brand position–also surprised the industry by announcing a $5-$7 “pairings menu” this week.
Easing commodity costs have allowed restaurants to get more promotional, although when paired with rising labor costs (especially in California, which we covered last week), it does set up an environment where restaurant profits will likely be squeezed over the next several months. Also, substitute food retail channels are likely to introduce their own price reductions in the months to come (as we’ve already seen from Walmart).
Summer has unofficially arrived, and with that comes the desire to relax, unwind and travel. And despite some of the economic uncertainty still facing consumers, 2024 is off to a surprising start for traffic in certain parts of retail. According to AAA, auto traffic growth for Memorial Day weekend was projected to grow by 4% compared to last year and by almost 2% versus 2019. Car travel has long been seen as the value-based travel method across the U.S., and who can forget the allure of the “summer road trip”. But inflationary pressures may have made it less appealing over the past few years. In the most recent consumer price index for May 2024, a drop in gasoline prices was a large positive contributor to the overall rate of 3.3%, which could provide a stronger consumer push for summer car travel.
With the positive momentum in auto traffic and gas prices, gas station and convenience store traffic has greatly benefited since Memorial Day weekend. In fact, visits to chains from May 20 to June 10 this year increased by 11% compared to the same weeks in 2023 and 15% versus 2022. Traffic to convenience stores and gas chains is up almost 30% compared to the same weeks in 2019. Traffic growth steadily climbed over the course of the three weekends measured, and the weeks had some of the highest growth rates so far in 2024 with the exception of a week in March. Even with the projected increase in auto traffic across the country, convenience and gas is the summer blockbuster, building on the consumer trends of the past year and the successful strategies of various retailers.
Wawa, in particular, saw strong visit patterns in the first unofficial few weeks of summer travel. The chain at a total level is up an impressive 14% year-over-year for the measured weeks. Looking at Wawa’s performance across various states, Florida drove much of the growth in traffic as the weather heats up, and outperformed some of the brand’s stronghold states like Pennsylvania & New Jersey. Average dwell times at Wawa locations in Florida are almost a minute higher than the chain average, highlighting that stores are not only pulling in more visits, but keeping visitors in-store for longer. The strong performance of the Florida locations, even during the off season, corroborates the brand’s investment in expansion across the state. One might suspect that Wawa is well positioned heading into the remainder of the summer with its coastal strategy.
Will C-stores continue to grow traffic as we officially enter the summer season? All signs point to yes, even if gas prices rise due to increased demand. Chains have done a fantastic job of enticing consumers with unique food offerings and might become the must-visit destination before heading to the beach this summer.
Darden Restaurants, Inc. operates a portfolio that includes some of the biggest names in full-service dining, including Olive Garden, LongHorn Steakhouse, Cheddar’s Scratch Kitchen, Yard House, Ruth’s Chris Steak House, Bahama Breeze, and Eddie V’s Prime Seafood.
How are these restaurants performing as Q3 2024 approaches? We took a closer look at the location analytics to find out which restaurant chains are thriving in today’s challenging economic climate.
Darden’s three largest restaurant chains – Olive Garden, LongHorn Steakhouse, and Cheddar’s Scratch Kitchen – are some of the best-known names in casual, full-service dining. These chains have a strong presence across the country and have experienced mainly positive YoY foot traffic this year so far.
Although foot traffic was lower YoY in January and April 2024, these dips can be attributed to external factors, such as January’s inclement weather and an April calendar shift (i.e. the timing of Easter, as well as the extra Saturday in April 2023). And in May the three chains quickly rebounded, ending the month with respective YoY visit increases of 2.4%, 6.4%, and 2.3%.
Darden operates various smaller brands offering different dining styles and price points, ranging from upscale options like Eddie V’s and Ruth’s Chris Steakhouse to more casual spots like Bahama Breeze and Yard House. These smaller chains also experienced strong visitation patterns in early 2024 – with May YoY visits up between 3.9% and 8.5%.
Darden’s strong February and May showings were likely fueled, in part, by two distinctly important days on the Darden restaurant calendar: Valentine’s Day and Mother’s Day.
In absolute terms, Olive Garden – Darden’s largest chain by far – drew the most visits on both holidays as compared to a January 1, 2024 baseline, claiming the top spot this year as America’s favorite Mother’s Day destination. But on a relative basis, Darden’s premium brands Eddie V’s and Ruth Chris experienced the biggest visit spikes, as people splurged on celebratory outings. And laid-back chain Bahama Breeze saw a sustained visit boost from Valentine’s Day through Mother’s Day, likely owing to its strong presence in Florida – making it an attractive destination for the snowbirds and vacationers who visit the state during the winter.
And surprisingly, even casual dining venue Yard House – known for its beer and sports atmosphere rather than romantic setting – experienced a Valentine’s Day visit boost. This suggests that there is a tangible benefit from these holidays across a wide range of dining styles – and restaurant operators can use these insights to encourage visits on such occasions.
Darden continues to attract customers to its restaurants in spite of a challenging economy by offering a variety of dining choices and capitalizing on popular dining-out occasions such as Mother’s Day and Valentine’s Day.
Will the company’s visit growth continue to trend upward as 2024 wears on?
Follow Placer.ai for the latest data-driven dining insights.
After a frigid start to the year, how have retail and dining foot traffic fared in the subsequent months? We dove into the data to find out.
Last year was all about experiences. But in 2024, consumer demand is once again striking a balance between “fun and stuff.” Though both retail and dining foot traffic were weighed down by January 2024’s extreme temperatures, the two categories bounced back in February, going on to see consistently positive YoY foot traffic growth through May.
May 2024’s strong showing was likely driven in part by impressive visit boosts on two important calendar highlights: Mother’s Day weekend and Memorial Day weekend. On both of these occasions, retail and dining foot traffic outperformed 2023 levels, a further sign of consumer resilience this year.
And drilling down deeper into data shows that some of this dining growth is being driven by full-service restaurants – another sign that the segment may be experiencing a comeback.
For quite some time, casual dining concepts – including both fast-casual & QSR – have had the upper hand among dining formats, as consumers sought inexpensive ways to splurge and cut back on full-service indulgences. But FSR has begun to rally, with experiential concepts, eatertainment, and breakfast-first chains driving significant traffic.
And location analytics points to a much more level playing field this year, with FSR YoY visit growth outperforming fast-casual & QSR in both March and in May. May’s visit boost in particular was likely aided by holiday visits – on both Mother’s Day and Memorial Day, full-service restaurants drew outsize crowds eager to enjoy nice meals out with friends and family.
A look at statewide visit data for both fast-casual & QSR and for full-service chains during the past three months – comparing March to May 2024 to the equivalent period of last year – shows both segments doing remarkably well throughout most of the U.S.
In the fast-casual & QSR space, all 50 states enjoyed positive YoY visit growth over the past three months – led by North Dakota (6.8%), New Hampshire (5.3%), Minnesota (5.1%), New Mexico (4.3%), and Rhode Island (4.2%). And in FSR, 42 states enjoyed positive growth – with some of the same states, including Rhode Island, New Hampshire, and New Mexico, claiming top spots.
Will full service continue its turnaround in the second half of 2024 and can fast-casual & QSR maintain its strength? How will overall retail traffic fare during the summer months and critical back-to-school season?
Visit Placer.ai to find out.
This report leverages location intelligence data to analyze the auto dealership market in the United States. By looking at visit trends to branded showrooms, used car lots, and mixed inventory dealerships – and analyzing the types of visitors that visit each category – this white paper sheds light on the state of car dealership space in 2023.
Prior to the pandemic and throughout most of 2020, visits to both car brand and used-only dealerships followed relatively similar trends. But the two categories began to diverge in early 2021.
Visits to car brand dealerships briefly returned to pre-pandemic levels in mid-2021, but traffic fell consistently in the second half of the year as supply-chain issues drove consistent price increases. So despite the brief mid-year bump, 2021 ended with overall new car sales – as well as overall foot traffic to car brand dealerships – below 2019 levels. Visits continued falling in 2022 as low inventory and high prices hampered growth.
Meanwhile, although the price for used cars rose even more (the average price for a new and used car was up 12.1% and 27.1% YoY, respectively, in September 2021), used cars still remained, on average, more affordable than new ones. So with rising demand for alternatives to public transportation – and with new cars now beyond the reach of many consumers – the used car market took off and visits to used car dealerships skyrocketed for much of 2021 and into 2022. But in the second half of last year, as gas prices remained elevated – tacking an additional cost onto operating a vehicle – visits to used car dealerships began falling dramatically.
Now, the price of both used and new cars has finally begun falling slightly. Foot traffic data indicates that the price drops appear to be impacting the two markets differently. So far this year, sales and visits to dealerships of pre-owned vehicles have slowed, while new car sales grew – perhaps due to the more significant pent-up demand in the new car market. The ongoing inflation, which has had a stronger impact on lower-income households, may also be somewhat inhibiting used-car dealership visit growth. At the same time, foot traffic to used car dealerships did remain close to or slightly above 2019 levels for most of 2023, while visits to branded dealerships were significantly lower year-over-four-years.
The situation remains dynamic – with some reports of prices creeping back up – so the auto dealership landscape may well continue to shift going into 2024.
With car prices soaring, the demand for pre-owned vehicles has grown substantially. Analyzing the trade area composition of leading dealerships that sell used cars reveals the wide spectrum of consumers in this market.
Dealerships carrying a mixed inventory of both new and used vehicles seem to attract relatively high-income consumers. Using the STI: Popstats 2022 data set to analyze the trade areas of Penske Automotive, AutoNation, and Lithia Auto Stores – which all sell used and new cars – reveals that the HHI in the three dealerships’ trade areas is higher than the nationwide median. Differences did emerge within the trade areas of the mixed inventory car dealerships, but the range was relatively narrow – between $77.5K to $84.5K trade area median HHI.
Meanwhile, the dealerships selling exclusively used cars – DriveTime, Carvana, and CarMax – exhibited a much wider range of trade area median HHIs. CarMax, the largest used-only car dealership in the United States, had a yearly median HHI of $75.9K in its trade area – just slightly below the median HHI for mixed inventory dealerships Lithia Auto Stores and AutoNation and above the nationwide median of $69.5K. Carvana, a used car dealership that operates according to a Buy Online, Pick Up in Store (BOPIS) model, served an audience with a median HHI of $69.1K – more or less in-line with the nationwide median. And DriveTime’s trade areas have a median HHI of $57.6K – significantly below the nationwide median.
The variance in HHI among the audiences of the different used-only car dealerships may reflect the wide variety of offerings within the used-car market – from virtually new luxury vehicles to basic sedans with 150k+ miles on the odometer.
Visits to car brands nationwide between January and September 2023 dipped 0.9% YoY, although several outliers reveal the potential for success in the space even during times of economic headwinds.
Visits to Tesla’s dealerships have skyrocketed recently, perhaps thanks to the company’s frequent price cuts over the past year – between September 2022 and 2023, the average price for a new Tesla fell by 24.7%. And with the company’s network of Superchargers gearing up to serve non-Tesla Electric Vehicles (EVs), Tesla is finding room for growth beyond its already successful core EV manufacturing business and positioning itself for a strong 2024.
Japan-based Mazda used the pandemic as an opportunity to strengthen its standing among U.S. consumers, and the company is now reaping the fruits of its labor as visits rise YoY. Porsche, the winner of U.S New & World Report Best Luxury Car Brand for 2023, also outperformed the wider car dealership sector. Kia – owned in part by Hyundai – and Hyundai both saw their foot traffic increase YoY as well, thanks in part to the popularity of their SUV models.
Analyzing dealerships on a national level can help car manufacturers make macro-level decisions on marketing, product design, and brick-and-mortar fleet configurations. But diving deeper into the unique characteristics of each dealership’s trade area on a state level reveals differences that can serve brands looking to optimize their offerings for their local audience.
For example, analyzing the share of households with children in the trade areas of four car brand dealership chains in four different states reveals significant variation across the regional markets.
Nationwide, Tesla served a larger share of households with children than Kia, Ford, or Land Rover. But focusing on California shows that in the Golden State, Kia’s trade area population included the largest share of this segment than the other three brands, while Land Rover led this segment in Illinois. Meanwhile, Ford served the smallest share of households with children on a nationwide basis – but although the trend held in Illinois and Pennsylvania, California Ford dealerships served more households with children than either Tesla or Land Rover.
Leveraging location intelligence to analyze car dealerships adds a layer of consumer insights to industry provided sales numbers. Visit patterns and audience demographics reveal how foot traffic to used-car lots, mixed inventory dealerships, and manufacturers’ showrooms change over time and who visits these businesses on a national or regional level. These insights allow auto industry stakeholders to assess current demand, predict future trends, and keep a finger on the pulse of car-purchasing habits in the United States.
