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The past couple of years have been challenging ones for the dining industry as high food prices and economic headwinds led many consumers to cut back on unnecessary indulgences. Still, people can’t eat at home all the time, and there’s always demand for restaurants that serve up good food and a welcoming ambiance – without breaking the bank.
So with Q4 2023 under our belts, we dove into the data to check in with two dining chains that are especially good at giving customers what they want: Shake Shack and Wingstop. How did they perform during the final quarter of 2023? And what lies ahead for them in the new year?
Shake Shack, curiously named after an amusement park ride from 70’s hit movie Grease, continues to impress. Following a robust third quarter, the gourmet burger joint maintained strong positive year-over-year (YoY) visit growth throughout Q4 2023 – finishing out the year with a remarkable 24.3% foot traffic jump in December 2023.
Wingstop, another darling of the dining industry, also ended 2023 with a bang. Whether celebrating the New York Knicks with a special lemon garlic flavor, or jumping on the dry January bandwagon with its own “dry rub January”, the popular chicken restaurant draws crowds by staying up-to-date with popular trends. And throughout Q4 2023, Wingstop saw positive visit growth ranging from 12.8% to 16.3%.
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The ongoing success of these two chains in a difficult overall environment shows that there’s more than one way to win at the dining game. With limited-time offerings like White Truffle Burgers, and sandwiches that feature Kimchi slaw, Shake Shack’s relatively upscale offerings have traditionally drawn affluent audiences. But as the chain has continued to expand, its customer base has diversified – with the median household income (HHI) of its captured market dropping by 8.6% over the past four years. Over the same period, the share of ultra-wealthy families and educated urbanites in the restaurant’s captured market declined, while the share of young professionals and urban low income consumers increased. Wider audiences, of course, means broader appeal – and more people getting addicted to Shake Shack’s delicious offerings.
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Wingstop, for its part, has pursued a somewhat different strategy. Positioned as an affordable eatery straddling the space between fast food and fast-casual, Wingstop draws less well-to-do consumers. Combining foot traffic data with demographics from STI’s PopStats shows that the median HHI of Wingstop’s captured market came in at $62.1K in Q4 2023, well below the nationwide baseline of $69.5K.
But despite targeting a demographic with less discretionary income, Wingstop has carved out a niche for itself as a to-go dining destination for people seeking the perfect place to sit down to a nice, big meal with the family. In Wingstop’s four biggest markets – Texas, California, Florida, and Illinois – the chain’s trade areas featured more persons per household than the statewide averages in Q4 2023. And Wingstop’s captured markets were also over-indexed for families with children – showing that parents are particularly likely to pay the restaurant a visit.
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Though food prices have stabilized and consumer confidence has begun to recover, last year ended on a tough note for restaurants. But while the category as a whole has yet to fully regain its footing, chains like Shake Shack and Wingstop are finding success by leaning into evolving consumer demand.
Will cooling inflation kickstart a dining revival? And what does the rest of 2024 have in store for Shake Shack and Wingstop?
Follow Placer.ai to find out.
Few things are more beloved by Americans than a steak – and two of the most popular steakhouse chains in the U.S. are Texas Roadhouse and Outback Steakhouse. Who is visiting these chains, and what characteristics do they share? We take a closer look.
Food-away-from-home prices remained high for much of 2023, presenting challenges for dining establishments as would-be restaurant patrons reconsidered going for a meal out. Outback Steakhouse in particular felt the impact of the dining downturn, with year-over-year (YoY) visits falling in 2023 – although the dip may also be due to the chain’s downsizing its store fleet. And the chain seems to have offset at least some of the drop thanks to its price increases, which increased the value of every visit.
Texas Roadhouse, meanwhile, continued its expansion and benefited from growing YoY foot traffic every quarter of 2023.
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Texas Roadhouse’s success is particularly notable given its trade area median HHI. Both Outback Steakhouse and Texas Roadhouse tend to have a lower median household income (median HH) in their trade areas when compared to the average fast-casual chain, despite having higher price points. The steakhouse leaders also have a trade area median HHI that is significantly lower than the overall fine-dining segment.
The lower median HHI of Texas Roadhouse and Outback Steakhouse visitors suggests that these diners may be avoiding the purchase of more casual, on-the-go meals and instead choosing to direct their more limited funds toward special occasion dining. And Outback Steakhouse and Texas Roadhouse may be seen as an affordable luxury for those seeking a more elevated dining experience than might be found at a local fast-casual joint.
By understanding the types of diners who visit the restaurant, dining chains can make sure to deliver the type of experience their customers are seeking – in this case, a special-occasion dining destination that won't break the bank.
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Outback Steakhouse and Texas Roadhouse Popular Among Suburban Segments
A deeper exploration of the psychographic compositions of each chains’ trade area reveals that suburban families are particularly drawn to Texas Roadhouse and Outback Steakhouse. For both chains, the share of households in Spatial.ai’s PersonaLive “Upper Suburban Diverse Families,” “Suburban Boomers,” and “Wealthy Suburban Families” segments exceeded the statewide average in several major states.
As suburban markets continue gaining momentum, Texas Roadhouse and Outback Steakhouse’s popularity with suburban audiences can help the chains stay ahead of the pack in 2024.
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The State Of Steak
The enduring appeal of a well-made steak (or Blooming Onion, or honey butter) is indisputable. Will customers continue to visit these chains for a special occasion? Or will 2024 bring with it a new shift in diner preferences?
Follow Placer.ai’s data-driven analyses to find out.
The Placer.ai Nationwide Office Building Index: The office building index analyzes foot traffic data from some 1,000 office buildings across the country. It only includes commercial office buildings, and commercial office buildings with retail offerings on the first floor (like an office building that might include a national coffee chain on the ground floor). It does NOT include mixed-use buildings that are both residential and commercial.
Remote work may not be bad for companies’ bottom lines – but it does appear to have drawbacks for employees. Fully remote workers were 35% more likely to be laid off in 2023 than those who came into the office at least part of the week. And full-time WFH personnel also got fewer promotions.
Still, reaping the benefits of in-person office work doesn’t require a full-time return to office. (Five days a week? Seriously?) And for many participants in the remote work wars, 2023 was a year for compromise. But what did the hybrid model look like in 2023? And who were last year’s office visitors?
We dove into the data to find out.
Analyzing office visit trends over the past several years suggests that some variation of the hybrid model is indeed here to stay – though the jury’s still out on whether we’ve found the sweet spot. Since Q2 2023, quarterly visits to office buildings have remained about 34.0%-38.0% below pre-COVID levels. But Q4 2023 office foot traffic was 12.9% higher than the equivalent period of 2022, suggesting that additional office recovery may still be in the cards.
Regionally speaking, Miami and New York closed out 2023 at the head of the pack, with visits about 20% below the pre-pandemic baseline. Dallas and Chicago finished the year with respective quarterly visit gaps of 31.8% and 43.0%. And San Francisco continued to bring up the rear, with office foot traffic 53.8% below pre-COVID levels.
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These general trends continued into January 2024. Nationwide, office buildings experienced a 42.1% year-over-four-year (Yo4Y) visit gap, potentially indicating stalling recovery. But at the same time, major markets across the country – most impressively San Francisco – saw sustained YoY visit growth, showing that the return to office (RTO) story is still being written.
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Whether office recovery has run its course, or whether 2024 promises a renewed upward trajectory – a more granular picture of the specific habits and characteristics of office-goers can help stakeholders adapt to evolving trends.
And while foot traffic remains substantially below 2019 levels, the affluence of office buildings’ visitor base has very nearly rebounded to what it was before COVID. In Q1 2019, the median household income (HHI) of the Nationwide Office Index’s captured market stood at $91.9K, a metric which plummeted in early 2020 as more affluent employees rode out lockdowns from home. But since then, the median HHI has slowly risen – reaching $90.1K - $91.6K in 2023.
Unsurprisingly, remote and hybrid work opportunities aren’t distributed equally – and wealthier, more-educated workers are better positioned than others to take advantage of them. But visitors to major office buildings tend to have significantly higher-than-average HHIs to begin with (STI’s PopStats puts the nationwide baseline at $69.5K). So even if the median HHI of office visitors is once again close to what it was before COVID, it is these relatively affluent employees that are coming in less frequently and helping to shape the new hybrid normal.
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At the same time, there has been a subtle but distinct decline in the share of parental households in offices’ captured markets – indicating that parents of children accounted for a smaller proportion of office visits in 2023 than in 2019. This change varied by region, with Chicago seeing the smallest shift and tech-heavy San Francisco seeing the largest one.
For many working parents, flexibility is the name of the game – and employees juggling parental responsibilities along with their work loads may be particularly eager to embrace working from home.
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Another data point that’s particularly important for stakeholders to understand is the daily breakdown of office visits throughout the week. And foot traffic data for 2023 shows that the TGIF work week that we first observed in 2022 remains more firmly entrenched than ever. People continue to concentrate office visits mid-week and log on from home on Mondays and especially Fridays – an effect that is most pronounced in San Francisco, and least pronounced in Miami. And for municipalities, CRE companies, and local businesses that rely on office foot traffic, recognizing the persistence of this pattern can be key to making the most of those days when offices are abuzz with activity.
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The new hybrid model remains a work in progress – and it’s too soon to tell whether offices will indeed see further attendance increases in 2024. But either way, the behaviors and attributes of office-goers will continue to evolve, presenting stakeholders with opportunities and challenges alike.
What does 2024 have in store for RTO? And how will the profile of visitors to America’s offices change in the new year?
Follow placer.ai/blog to find out.
Just as the dining space was beginning to recover from the COVID pandemic, the ongoing inflation brought a fresh set of challenges to the sector in 2022 and 2023. How did the headwinds impact Burger King, Popeyes Louisiana Kitchen, Taco Bell, KFC, and other leading brands from the RBI and Yum! Portfolio? We dove into the data to find out.
Restaurant Brands International (RBI) and Yum! Brands each own three QSR banners along with one fast-casual chain. RBI owns the Burger King, Popeyes Louisiana Kitchen, and Tim Hortons brands as well as fast-casual sub chain Firehouse Subs. Yum! Brands operates the KFC, Pizza Hut, and Taco Bell fast-food banners and the fast-casual The Habit Burger Grill.
Both companies’ banners saw year-over-year (YoY) growth in Q1 2023, likely aided by favorable comparisons to an Omicron-plagued Q1 2022. And although traffic dropped off as the year went on – perhaps due to consumers cutting back on dining out – the dip was subdued, with visits staying relatively close to 2022 levels.
RBI’s banners ended the year with just a 2.5% YoY dip in Q4 2023, although Firehouse Subs, Popeyes Louisiana Kitchen, and Tim Hortons all saw positive visit growth for three out of four quarters of 2023.
Following three quarters of YoY visit growth for the Pizza Hut banner and for the company as a whole, Yum! Brands also began feeling the impact of the consumer spending contraction, with the company’s Q4 2023 foot traffic performance 3.7% lower, on average, than in 2022.
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The wider QSR space tends to serve trade areas composed of Census Block Groups with an overall median household income (HHI) that is lower than the median HHI nationwide ($63.2K for QSR compared with $69.5K nationwide). And the median HHI in the trade areas of Pizza Hut, Taco Bell, KFC, Burger King, Tim Hortons, and Popeyes is even lower than the median HHI in the wider QSR space.
The relatively low median HHI in the trade areas of RBI and Yum! Brands’ QSR banners means that visitors to these chains may be feeling particularly frugal, which could explain the slight dips in foot traffic towards the end of 2023.
But some of these brands are already implementing changes to woo back their budget-conscious customers. Taco Bell recently unveiled a new value menu that includes some items priced at $1.99, and several other chains in the Yum! and RBI portfolio have launched national campaigns advertising wallet-friendly promotions – which may well bring foot traffic back up in 2024.
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QSR chains seem particularly attractive to singles, with the trade area of the average QSR brand containing a larger share of one-person and non-family (roommate) households compared to the nationwide average (33.8% to 33.2%). And analyzing the household composition of the QSR banners of RBI and Yum! reveals that the trade areas of these brands tend to include an even larger share of one-person and non-family households than the wider QSR industry. (Pizza Hut is the sole exception, with one-person and non-family households making up 33.6% of households in its trade area – slightly less than the QSR industry average of 33.8%, but still more than the nationwide average of 33.2%.)
The trade areas of QSR brands also tend to include a greater share of large households (households of four or more people) compared to the percentage of 4+ person households nationwide. But Yum! And RBI banners (with the exception of Popeyes) seem to serve fewer 4+ person households compared to the QSR average (although Pizza Hut, Taco Bell, KFC, Burger King, and Tim Hortons still have more 4+ person households in the trade areas compared to the nationwide average.)
This trade area demographic data could help Yum! and RBI plan their 2024 promotions – discounts on larger orders could be particularly appealing to Popeyes diners, but may not necessarily drive demand among the visitor base of the other QSR banners. At the same time, all brands analyzed may benefit from offering value-priced individual items that can help singles living alone or with roommates budget smartly.
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With food-away-from-home prices expected to increase in 2024, chains that offer low-cost options are likely to see a resurgence – and RBI and Yum! may well benefit from consumers’ continued thriftiness.
Who wouldn’t want weekends to last seven days? That’s the thinking behind Marine Layer’s eco-friendly and “absurdly soft” tees. This San Francisco-based company, founded in 2009, has its beginnings in a shirt thrown away by a girlfriend. One man’s trash is another man’s treasure, and from that action sprouted the seeds for founder Mike Natenshon as he set on his quest to create the ultimate soft-on-day-1 shirt. Forty-five stores later, Marine Layer has spread across the nation, timed perfectly with our desire for coziness after extended time at home made comfy clothing a must.
One of the higher-trafficked outdoor Marine Layer locations is at Ponce City Market in Atlanta. This shopping center boasts other in-demand brands like Lululemon, Reformation, and Buck Mason. Another popular location resides at 12South, a Nashville neighborhood spanning a half mile that includes walkable local businesses, bars, and bakeries. White Bison Coffee and Five Daughters Bakery are places to stop in for a bite while shopping. And in Boulder, Pearl St is another pedestrian-friendly venue for shoppers.
It’s clear that certain segments are attracted to Marine Layer’s offer - most notably Young Professionals in Atlanta and Boulder, who make up a quarter of the customers, as well as Ultra Wealthy Families across the board, particularly in Nashville where they comprise a fifth. There are a few clientele differences, such as the fact that Marine Layer draws Urban Low Income in Atlanta and more Sunset Boomers in Boulder.
Looking at the potential market for these three areas, we see some interesting patterns arise via Spatial.ai Followgraph. For instance, all three markets overindex in following the musical Hamilton, fitness brand Peloton, outdoor sporting goods store REI, and the confection Moon Pie. Regarding fashion brands, Tory Burch, J. Crew, Lululemon, Vineyard Vines, and Patagonia are popular too.
Faherty is a brand that has been around for 10 years but that we’ve seen accelerating its physical store footprint in the last few years. Evoking chill surf trips, family bonfires, and hikes in the great outdoors, this American brand invites you to cozy up in its sweaters, spend a Saturday riding the waves, or just all-out enjoy family time and making memories. Its locations span from east coast to west coast, with popular locations in Panama City Beach, New York City, Austin, Manhattan Beach, among others.
The appeal of this brand is such that it finds itself on the beach, in urban high streets, and suburban locations, indicating that it’s really more about the vibe. Not only that, the segments are quite varied in terms of who is shopping at Faherty (using PersonaLive segments). In Panama City Beach, we see largely Ultra Wealthy Families, Sunset Boomers, and Young Professionals. Meanwhile, in SoHo, Educated Urbanites and Young Urban Singles make up the lion’s share of the trade area. The Austin shopper profile is more similar to the Panama City Beach one, with the addition of Educated Urbanites as well. This intergenerational appeal is possibly rooted in the ethos of the brand with its focus on family, friends, and enjoying life’s moments.
One thing that these shoppers do have in common? High household incomes. Most of these shoppers come from households earning $150K+, with particularly high earners hailing from Greenwich, CT.
While the customers from Florida, New York, and Texas are geographically dispersed, they do share some commonalities: an above average propensity to be bubbly drinkers and wine drinkers, clearly in line with the brand’s positioning of celebratory moments. Customers in these three markets also consider themselves “Pilates People”, “Joggers,” and “Fitness Fans.” You will find Faherty devotees from all three of these markets at the spa, at the museum, or enjoying book clubs. And largely in keeping with Faherty’s sustainability promise, many of their customers consider themselves Environmental Activists.
Malls have long acted as a gleaming symbol of American retail. Following the opening of the first indoor mall in 1956, and as the American middle class increasingly moved from the city to the suburbs, malls continued to open at a rapid rate. By 1960, some 4,500 shopping centers had opened nationwide, filling the growing demand for “third places” – spaces that allowed the newly suburban populations to gather, socialize, and create community. And while that role evolved over the years, it’s safe to say that malls have played a major part in shaping the American shopping culture.
But malls’ rapid expansion led to an oversaturated market – some estimates suggest that there are approximately 24 square feet of retail space per U.S. citizen, as compared to 4.6 for the U.K. and 2.8 for China. Many began to predict the demise and downfall of malls, and that narrative intensified as online shopping grew in popularity. The rise of big-box stores, a focus on “services, not things,” and COVID-19 only accelerated these trends.
A lot of the doom and gloom predictions tend to de-emphasize the mall's role as a modern incarnation of a bustling downtown shopping area.
But a lot of these doom and gloom predictions focus on malls only as a place to shop, and tend to de-emphasize their other role as the third place – a modern incarnation of a bustling downtown shopping area, replete with shops, services, and places to meet. And after two years of isolation and a new, pandemic-induced wave of suburban relocation, malls’ potential to bring people together is more prized than ever.
So although malls were hit hard during COVID-19, many of them are finding ways to reinvent themselves and stay relevant. Today, more than halfway through 2022, the challenges that malls face continue to evolve and change – but malls are evolving too. This white paper covers a few specific ways that some malls have found to thrive in the new normal. Some shopping centers are turning to entertainment to draw crowds into their doors. Others are focusing on offering a full visitor experience that extends beyond simply grabbing a new shirt or a burger at the food court. Still, more are embracing omnichannel options, offering an integrated on and offline experience to their shoppers. In the face of significant retail challenges, top-tier malls are turning to innovative solutions to stay ahead of the game.
The pandemic posed significant challenges to malls. Although foot traffic to the category rose back up in the summer of 2021, the Delta and subsequent Omicron waves brought visits down once more. And as visit gaps post-Omicron began to narrow, inflation and gas prices put the brakes on any return to normalcy. April and May 2022 saw visits beginning to trend up, though the unrelenting rise of inflation, the highest it’s been in the past 40 years, has slowed that recovery slightly.
Foot traffic data shows that malls are continuing to attract visitors, despite the challenges that seem to crop up weekly.
Still, foot traffic data shows that malls are continuing to attract visitors, despite the challenges that seem to crop up weekly. And while they may no longer play the central role they once did in Americans’ shopping routines, malls still serve as indoor community hubs where friends and family can come together for diverse food, shops, and entertainment options. This could explain why top-tier malls keep on coming back despite the seemingly constant obstacles.
Comparing monthly visits from January 2022 through July 2022 to the same period in 2019 highlights the significant difficulties facing the sector. Indoor malls, open-air lifestyle centers, and outlet malls alike saw marked lags in foot traffic as compared to three years ago.
Monthly year-over-three-year (Yo3Y) foot traffic comparisons also highlight mall resilience.
The monthly year-over-three-year (Yo3Y) foot traffic comparisons also highlight mall resilience. Following an Omicron-plagued January, the visit gaps narrowed in February 2022 to less than 5% for all the segments. And although the increase in gas prices and inflation brought visits down in March, malls quickly bounced back in April 2022, with indoor malls seeing only 1.8% fewer visits than in 2019 and open-air shopping centers down only 4.8% Yo3Y. Foot traffic fell again in May and June as consumers tightened their budgets in the face of rising prices, but consumers appear to have quickly made peace with the new economic reality. By July 2022, visits to indoor malls and open-air lifestyle centers were only 3.5% and 2.7% lower than they had been in July 2019.
COVID didn’t just impact visit numbers – since 2020, mall visits have also gotten shorter, likely a result of pandemic restrictions and a general desire not to congregate any longer than necessary. And although 2021 and 2022 saw a slight uptick in time spent at malls and shopping centers – from 60 minutes in 2020 to 62 minutes in 2021 and 2022 – the median dwell time is still significantly lower than the 70 minutes median dwell time of pre-COVID 2018 and 2019.
Shorter visits are not necessarily a bad thing – intent-driven shoppers may simply be doing more research ahead of time and less in-mall browsing.
Shorter visits are not necessarily a bad thing in and of themselves – consumers today are highly informed, so many intent-driven shoppers may simply be doing more research ahead of time and less in-mall browsing. But shorter (and fewer) visits do mean that malls must focus on giving shoppers a reason to visit. We explore some successful strategies below.
Malls have long integrated entertainment into their overall experience in the form of arcades, movie theaters, and even coin-operated animal rides. Some malls, however, are taking their entertainment offerings to the next level.
In August 2021, CBL Properties, a Tennessee-based property developer, announced the opening of the Hollywood Casino by Penn National Gaming in the York Galleria Mall in York, Pennsylvania. The 80,000 square foot casino, which boasts 500 slots and 24 live-action table games, opened in the mall’s lower level. The space was occupied by a now-closed Sears department store, and the entertainment venue now functions as a new anchor to draw customers in.
The casino’s opening has had a dramatic impact on the mall’s foot traffic. In a year-over-three-year (Yo3Y) comparison, July 2021 saw 2.4% fewer visitors than July 2018. But when the casino opened in August 2021, visits to the location jumped to 31.4% Yo3Y. This increase is all the more impressive considering that the casino opened on August 19th, with only 12 days left in the month.
The mall, which had seen negative Yo3Y visit numbers until the casino’s opening, has sustained the positive visit trend through July 2022 – a testament to the appeal of in-mall entertainment.
Another mall betting on indoor entertainment is the Pierre Bossier Mall in Bossier City, Louisiana. In April 2022, Surge Entertainment opened a child-friendly space, which includes zip-lining, bowling, laser tag and arcade games. The Surge Entertainment chain is co-owned by Drew Brees, the former New Orleans Saints quarterback, and has 15 locations around the country. The Pierre Bossier Mall branch is filling the space vacated by Virginia College, which closed its doors in 2018.
Since Surge Entertainment opened its Bossier City location, the mall has seen a dramatic increase in average dwell time.
Since Surge Entertainment opened its Bossier City location, the mall has seen a dramatic increase in average dwell time. Between July 2021 and March 2022, median dwell time hovered between 51 and 58 minutes. But following the center’s opening, median dwell time jumped to 78 minutes. Since then, the median dwell time has remained consistently elevated: In the four months since the Surge Entertainment opening, median dwell times did not drop below 75 minutes.
Brick-and-mortar retailers once viewed online shopping as a threat – but now, mall owners and operators are increasingly turning to digital channels to complement existing approaches. COVID-19 and the surge of online shopping further fueled malls’ digital progress. Over the past two years, large malls and suburban shopping centers across the country have been rolling out various online and social shopping options and adopting omnichannel strategies.
In September 2020, Centennial, a real estate investment firm with many malls and mixed-use entertainment centers in its portfolio, launched a chain-wide omnichannel platform called Shop Now!. The app allows consumers to shop across all Centennial malls the way someone would shop on Amazon.
The first phase of the program, which launched in October 2020, allowed users to browse an AI-powered search engine connected to the inventory of all of the stores operating in their mall of interest. In February 2022, Centennial debuted phase two of the program at its Santa Ana, CA based MainPlace Mall. It allows customers to consolidate orders from several stores into a single cart, get the order fulfilled by personal shoppers, and have the orders ready for same-day delivery or on-site pickup.
The e-commerce app could have detracted shoppers from physically going to the mall – but instead, the program increased both monthly and loyal visitors.
The app allows consumers to browse and shop from the comfort of their phones. It could have detracted shoppers from physically going to the mall – but instead, the program has increased both monthly and loyal visitors. In the months following the launch of the second phase, MainPlace Mall saw its loyal visits increase by 5% (from 46.2% in February ‘22 to 51.3% in June ‘22), while overall monthly visits in April ‘22 increased by 5.5% when compared to 2019. The digital investment also helped the mall make sales that could have been lost to other e-commerce platforms. The mall’s brick-and-mortar success following the addition of a digital channel highlights how malls can rise to the top by embracing an omnichannel strategy.
Continuing its innovative streak, the MainPlace Mall recently added an experiential component with the opening the American Ninja Warrior Adventure Park in July 2022 in the place of four former retail stores. During its first month of operation, the park drove the mall’s share of loyal visits up by 13.4% compared to the previous month while boosting Yo3Y monthly visits by 18.0%.
The difference in impact between the online platform launch and the opening of the American Ninja Warrior Adventure Park indicates that malls can enjoy both gradual gains over time as well as jumps in foot traffic and loyalty, depending on the strategy they adopt.
Omnichannel strategies can also revitalize food courts hit hard by the pandemic. Arundel Mills Mall, part of the Simon Property Group, began offering online orders in February 2022 via a platform called Snackpass, allowing users to use the app at various eateries around the mall. Snackpass, launched in 2017 as a food ordering app on the Yale campus, facilitates group ordering and includes various social features. Its current iteration allows customers to pre-order food, skip lines, collect rewards, and engage with friends. It also offers discounts on group orders, in an effort to promote social dining.
Since the beginning of the Snackpass partnership, the shopping center itself is seeing more visitors – many of whom are coming from farther away.
Since the beginning of the Snackpass partnership, the shopping center itself is seeing more visitors – many of whom are coming from farther away. In the five months following the app’s launch, Arundel Mills saw an overall increase of 15 square miles to its True Trade Area (TTA), and an increase of 29.5% in visits per sq. ft. – The consistent increase in TTA and visits per sq. ft. are a testament to the power of innovative dining partnerships to draw traffic to top-tier malls.
With many retailers reducing their on-mall presence, empty brick-and-mortar stores have attracted plenty of negative attention. But now, malls are increasingly repurposing vacated spaces in new, innovative ways that resonate with local communities and can fill their evolving needs.
At the Ocean County Mall in Toms River, NJ, Simon Property Group repurposed the huge space left by a former Sears store and turned it into a lifestyle center, with stores opening throughout 2020. The space is now being used by a number of highly popular chains such as LA Fitness, Ulta Beauty, HomeSense, and P.F. Chang’s and also includes a children's play area.
This pivot seems to be working. Median dwell time to the mall has increased from 53 minutes to 56 minutes, a significant change when considering that a majority of malls have recently seen their dwell times drop.
The center has also seen the median age for its trade area decrease from 40.5 years old in the first half of 2021 to 37.2 in the first half of 2022, a dramatic shift in visitor demographics. Yo3Y visits are strong as well – July 2022 were up by 17.1%.
In a similar tale of a closed Sears turning into a lifestyle center, the Northshore Mall in Peabody, MA turned the space vacated by the department store into a mixed-use center. The most significant anchor is now the high-end Life Time Fitness Center that offers cardio, weights, and functional training rooms, and includes yoga, pilates, and cycling studios, indoor and outdoor pools, basketball and pickleball courts, saunas, and a bistro.
As soon as the health club opened its doors in July 2021, visits to the mall increased – significantly outpacing the levels seen when Sears was still open.
As soon as the health club opened its doors in July 2021, visits to the mall increased – significantly outpacing the levels seen when Sears was still open. Both Yo3Y and year-over-four-year (Yo4Y) foot traffic numbers were impressive, with July 2022 seeing 17.2% more visitors than three years prior.
As visits to malls become more focussed, selecting the right tenant has never been more important – and that may mean looking at unconventional occupants to draw in customers.
In one example of tapping into local needs, the Westfield Oakridge shopping center in San Jose, CA, opened a specialty grocery store on its premises. 99 Ranch Market, one of the largest Asian supermarket chains in the U.S., began operating its first mall location in March 2022. The location includes classic grocery store items such as produce, meat, and seafood sections, and also boasts a dining hall, tea bar, and bakery.
Its opening day saw lines snaking out the door, as excited locals queued to sample the store’s delicacies. And the crowd-drawing hype seems to be more than a flash in the pan – the months following the opening were the mall’s strongest in the past year and a half. Yo3Y visits were up by 10.1% in July 2022 , with some shoppers reporting that the addition of the grocery store had turned Westfield Oakridge into their all-in-one stop shop.
Although the area was not lacking in grocery options, retail foot traffic data indicates that the new 99 Ranch Market at Westfield Oakridge Mall still filled a void.
Although the area was not lacking in grocery options, retail foot traffic data indicates that the new 99 Ranch Market at Westfield Oakridge Mall still filled a void – the new grocery store’s trade area has only minimal overlaps with the other trade areas of the nearby 99 Ranch Markets locations. This means that most of the new 99 Ranch Market’s customers were not being well-served by the existing locations of the chain.
Westfield Oakridge is not the only San Jose mall turning to food to attract the crowds. On June 16th 2022, following much hype and a pandemic-related delay, Eataly, the all-in-one Italian market, restaurant, and cooking school opened its first Northern California location at the Westfield Valley Fair in Santa Clara, CA.
Prior to the launch, the Westfield Valley Fair mall was already one of the more successful malls in the country – but the opening of Eataly seems to be driving even more foot traffic. Yo3Y visits to malls during Eataly’s opening week exceeded 20% for the first time in months and have since remained consistently elevated, with visits for the week of July 25th up 27.7% relative to the equivalent week in 2019.
In March 2022, regional department store Von Maur opened its doors at The Village of Rochester Hills, an open-air lifestyle center in Michigan. The retailer, which has 36 locations throughout the Midwest, took over the space left vacant by Carson’s, another Midwest-based department store.
What may be the first new department store in the Detroit metropolitan area in over a decade is driving visits to the shopping center.
What may be the first new department store in the Detroit metropolitan area in over a decade is driving visits to the shopping center. Von Maur’s March 2022 opening pushed Yo3Y visits up by 16.9% compared to the mere 4.3% Yo3Y increase the month before.
Part of the secret to Von Maur’s success lies in the psychographic characteristics of residents within the mall’s trade area. Using Spatial.ai’s GeoWeb data, a tool which tracks online engagement with various trends and topics by neighborhood, we found that the TTA surrounding The Village had an index of 131 for department store shoppers. In other words, people in the mall’s trade area exhibited heightened interest in department stores – they engaged with department-store-related content at a rate that was 1.3 times higher than the national average – which helps explain why Von Maur is thriving in this specific location. And in another testament to the strength of immersive retail experiences, Von Maur, which focuses on curating a unique shopper journey and features a pianist at all of its locations, has been ranked the top department store in America.
The addition of Von Maur is not the only change that The Village is implementing – the mall has continued adding new stores and will be opening more throughout the year. These, too, will likely boost foot traffic to the lifestyle center.
The mall’s ability to select tenants that cater to, and reflect the needs and behaviors of its consumers is likely to continue driving success. By drilling down into the nitty-gritty details of who comes to shop, where they come from, and what shops they enjoy frequenting, mall management can tailor the shopping center to meet the needs of its base.
The “death of the American mall” has been predicted for years. The reality, however, is much more nuanced than that – like many other sectors, malls are undergoing a shift to help them better serve evolving customer needs and survive and thrive in an ever-shifting retail landscape.
The malls featured in this white paper have found ways to consistently attract visitors despite the various obstacles faced by the category over the past two years. By understanding that the American mall must evolve along with the consumers, mall owners can successfully revitalize their retail spaces.
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.
