Dollar, Mass and Home Retailers Expected to See Increased Holiday Traffic
Retail traffic data firm Placer.ai has shared a new report highlighting several retail trends to watch during the 2022 holiday season.
Like the grocery sector, the report points to many consumers moving towards private brands in the retail space to save money as inflation remains high.
"Our data suggests that lower- and middle-income consumers have begun to trade down ahead of the holiday season due to inflation,” R.J. Hottovy, head of Analytical Research at Placer.ai told Store Brands. “With consumers eager to host family and friends this holiday season after pandemic-related disruptions the past few years, we expect private brands will play an important role this holiday season."
One of the major findings is that consumers are expected to continue visiting dollar stores and mass merchants, such as Walmart, for their holiday needs. Placer.ai reported that between January and August 2019, only 4.9% of residents in Walmart’s trade area had a yearly household income above 200k, compared to 5.2% in the same period in 2022, showing that more high-income shoppers are making the switch.
In Q2 of this year, previous Placer.ai data showed the four major discount and dollar chains (Five Below, Dollar General, Family Dollar and Dollar Tree) saw a combined 8% increase in visits compared to Q2 2021, a 20.5% increase compared to Q2 2019 and a 13.2% increase from Q1 of this year.
“The impact of inflation will most likely continue into the holiday season, with consumers across the income spectrum looking for ways to save on gift and party shopping,” wrote the firm.
In the new report, Placer.ai said that it expects both high-end and budget home retailers to see increased visits. During September, visits to home furnishing stores overall were down almost 30% compared to 2019, but at Crate & Barrel, for example, they were up almost 10%. The expected increase in traffic points to more holiday gatherings, as a recent poll from Chicory found that 70% of respondents said they plan to host or attend a gathering of 10 or more people this holiday season.
Placer.ai also found that consumer behavior is expected to be bifurcated, as the upcoming holiday season will likely see differing behavior between higher-end and budget consumers. Recent weekly foot traffic data shows luxury department stores outperforming both off-price retailers and the overall apparel average. Year-over-year (YoY) visits the week of Sept. 26th were down just 3.3% for luxury department stores while discount and overall apparel saw 7.2% and 8.7% dips in traffic, respectively.
The full holiday report from Placer.ai can be found here.