What Grocery Foot Traffic Tells Us About 2023 So Far

Placer.ai expert talks with Progressive Grocer about food retail trends and opportunities
Lynn Petrak, Progressive Grocer
Placer.ai graph
Placer.ai's data show that consumers are thoughtful about their grocery trips as they grapple with inflation.

At the halfway point of 2023, location analytics company Placer.ai is out with a new whitepaper on grocery store visits following consecutive years of disruption due to the pandemic, inflation and other macro challenges. According to Placer.ai’s latest location intelligence, retail visits in general and grocery trips, specifically, are on a general downward trend.

That said, the whitepaper noted that “plenty of bright spots can be found, with grocers well positioned to adapt to changing consumer behaviors.” Food retailers have pivoted effectively in different ways, Placer.ai’s paper reveals.

[Read more: "EXCLUSIVE: Consumers Prefer Traditional Grocery Stores"]

For example, discount grocers like ALDI and Lidl have seen higher traffic in response to inflation. Also, in a high-price environment, consumers across channels are back to the basics with mission-driven shopping, evident in a rise in median visit duration and a lag in average visit frequency that suggests people are planning their grocery trips more carefully. Reaching those planners with rewards and deals can pay off at the point of sale.

As shoppers are back in stores – but planning, browsing and buying differently – Placer.ai’s report emphasized the fact that the store experience is changing, too. The firm called out experiences offered by H-E-B, which recently opened a two-story store in Austin, Texas, with a host of experiential offerings. Placer.ai also highlighted the rise of smaller-format locations from chains such as Meijer and Wegmans that deliver an efficient, interesting shopping journey with fewer operating expenses. Additionally, the use of retail media networks, amplified by local intelligence, can help grocers glean more information about customers that visit each store and hence tailor advertising in a more pointed way, the paper noted.

In a recent sit-down interview with Progressive Grocer, R.J. Hottovy, head of analytical research at Placer.ai, touched on some of the topics in the whitepaper and provided other observations at the midway point of the year. “You go back every year to 2020 and there is kind of a theme. 2020 was a year of survival just making sure we got by with the pandemic. 2021 was the year of changing consumer behavior. And then in 2022, inflation just dropped a bomb, and there was a lot of change. We saw an immediate shift, with things like growth in dollar stores,” he recalled. “So now it’s 2023 and the theme is all about maximizing the return and getting through. I think it’s very much a value-focused mindset and I see that across the board.”

The evolution isn’t over yet, either, he added. “Inflation has been the number one personal decision for a lot of consumers, but it’s interesting, because all of the sudden grocery inflation is starting to moderate faster than restaurant inflation,” Hottovy pointed out. “It’s adding a bit more pressure to restaurant companies and groceries are picking that up.”

Echoing the findings in the whitepaper, Hottovy observed that mid-sized chains and those who are delving into smaller format stores are setting themselves up to stay competitive. “That’s been the offset. The regional players have done a really good job and are being smart about merchandising,” he said.

He also underscored the point that stores are investing in things like in-store experiences, retail media networks and other technologies to not only stay competitive now but to future-proof their operations: “It’s about keeping that customer happy because if they enjoy it and had a good experience, they’ll come back. It sounds simple and intuitive, but a lot of times, people can forget that.”

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