Placer.ai released its Q1 2024 Retail & Dining Review that looked at how all the different retail segments performed during the first quarter of 2024 based on foot traffic. The year had a slow start, but things picked up, leading to an overall fairly successful quarter. Discount/dollar stores had the best performance, while dining — even sit-down restaurants — overall saw an uptick in weekly visits.
Despite news of store closures and bankruptcy in the segment, discount and dollar stores led the pack with 11.2% year-over-year (YoY) quarterly visit growth. This was followed by grocery stores, fitness chains and superstores. Despite the high interest rates continuing to weigh on the housing and home renovation markets, the home improvement & furnishing segment maintained a minor YoY visit gap.
Dollar General continued to dominate the discount & dollar store space in Q1, with visits to its locations accounting for nearly half of the segment’s quarterly foot traffic (44.7%). Next was Dollar Tree, followed by Family Dollar and Five Below. Together, the four chains — all of which experienced positive YoY quarterly visit growth — drew a whopping 91.6% of quarterly visits to the category.
In the grocery segment, budget-friendly chains took the lead. Aldi drove a chain-wide 24.4% foot traffic increase in the first quarter, by expanding its fleet, while also increasing the average number of visits per location. Other value-oriented chains, including Trader Joe’s and Food Lion, experienced significant foot traffic increases of their own. Though conventional grocery leaders such as H-E-B, Kroger and Albertsons saw smaller visit bumps, they too outperformed Q1 2023 by meaningful margins.
Low cost was key to success for fitness chains in the first quarter — with value gyms experiencing the biggest visit jumps. EōS Fitness and Crunch Fitness, both of which offer low-cost membership options, saw their Q1 visits skyrocket 28.9% and 22.0% YoY, respectively — helped in part by aggressive expansions. At the same time, premium and mid-range gyms like Life Time and LA Fitness are also finding success.
Similar to Q4 2023, membership warehouse chains — Costco Wholesale, BJ’s Wholesale Club and Sam’s Club — drove much of the superstore category’s positive visit growth, as shoppers likely engaged in mission-driven shopping in an effort to stretch their budgets. Still, segment mainstays Walmart and Target also enjoyed positive foot traffic growth, with YoY visits up 3.9% and 3.5%, respectively.
Dining experienced a slump in January, as consumers likely opted for delivery during the cold weather. But the segment rallied in February and March, even though foot traffic dipped slightly during the last week of March, when many families gathered to enjoy home-cooked holiday meals.
Coffee chains and fast-casual restaurants saw the largest YoY visit increases, followed by QSR — highlighting the enduring power of lower-cost, quick-service dining options. But full-service restaurants also saw a slight segment-wide YoY visit uptick in Q1. Within each dining category, however, some chains experienced outsize visit growth including favorites such as Dutch Bros. Coffee, Slim Chickens, In-N-Out Burger and Texas Roadhouse.
Home improvement & furnishings’ relatively lackluster Q1 visit performance should come as no surprise. But the narrowing of the visit gap in March, which also saw one week of positive visit growth, may serve as a promising sign for the segment. Although, some bright spots stood out in Q1, including Harbor Freight Tools, which saw visits increase by 10.0%, partly due to the brand’s growing store count. Tractor Supply Co., Menards and Ace Hardware also registered visit increases.
Though unusually cold and stormy weather left its mark on the retail sector’s January performance, February and March saw steady YoY weekly visit growth that grew more robust as the quarter wore on, noted Placer.ai. March ended on a high note, with the week of March 25 — including Easter Sunday — seeing a 6.1% YoY visit boost, driven in part by increased retail activity in the run-up to the holiday. Placer.ai foresees that though prices remain high and consumer confidence has yet to fully regain its footing, retail’s healthy Q1 showing may be a sign of good things to come in 2024.
