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This white paper analyzes Q3 2022 foot traffic performance for seven key retail and service categories. For each sector, we broke down weekly foot traffic data over the past quarter and identified several foot traffic leaders that represent the continued resilience of brick-and-mortar businesses over the past quarter.
Offline Fitness and Discount stores continued to thrive in Q3 2022, while visits to the Grocery, Superstore, and QSR sectors held relatively steady. Mall foot traffic saw a slight downturn, but full-service restaurants bore the brunt of tighter consumer budgets.
Offline Fitness has been on an impressive growth streak this year after making a full recovery in Q1 2022. The category remained strong in Q2 and the trend continued throughout Q3 2022, with visits up 16.6% relative to Q3 2019 and up 25.6% relative to Q3 2021. Discount and dollar stores also saw their foot traffic up by double digits relative to Q3 2019 and up 0.8% relative to a strong Q3 2021.
Grocery, Superstore, and QSR foot traffic remained more or less on par with previous years. Grocery and Superstore visits fell 3.9% and 2.9% year-over-year (YoY), respectively, but the categories saw a 3.0% and 2.6% increase in visits relative to Q2 2019 – indicating that both segments may still be enjoying a long-term pandemic-driven boost. QSR visits fell 3.6% year-over-three-years (Yo3Y), perhaps due to the numerous permanent branch closures of 2020 and early 2021. Still, visits stayed within 0.1% of Q3 2021 levels, indicating that the category has stabilized post-COVID – an impressive achievement considering the economic uncertainty.
Visits to indoor malls and open-air lifestyle centers are still lagging slightly behind their Q3 2019 levels, but foot traffic is only 1.6% lower than in Q3 2021, showcasing the resilience of the sector in times of economic stress. And restaurants, which bore the brunt of the COVID lockdowns, are now again feeling the impact of inflation, with visits down 12.4% Yo3Y and down 4.1% year-over-year (YoY).
Throughout the quarter, weekly visits to Discount & Dollar stores remained elevated relative to pre-pandemic 2019 and tracked closely with 2021 weekly visit numbers. The significant discrepancy between the Yo3Y and YoY visit trends highlight the massive expansions in the sector over the past few years which propelled Discount & Dollar store leaders such as Five Below and Dollar General far ahead of their 2019 visit numbers. At the same time, the relative constancy between this year’s and last year’s Q3 visit numbers indicate that discount & dollar stores are holding on to their pandemic gains as the current climate continues to favor these value-driven retailers.
Many of the leading Discount & Dollar stores, including Five Below and Dollar General, underwent significant expansions over the pandemic, and these brands are succeeding in holding on to their pandemic success as they serve today’s budget-conscious consumers. But looking at the wider industry indicates that the current economic climate is not benefiting all discount brands equally, with some retailers seeing declines relative to their pre-pandemic or even 2021 Q3 benchmark.
The differences of visit performance in the Discount & Dollar store space may hint at the wider retail phenomenon. In retail, like in dining, it seems that larger brands that managed to stay open over most of the pandemic have gained significant brand recognition and customer loyalty and cemented their place as category leaders, while some smaller brands are now playing catch-up.
Offline Fitness was one of the major winners of 2022, and visits to the category remained elevated both YoY and Yo3Y in Q3 2022. And while the weekly foot traffic analysis indicates that some of the momentum may be diminishing, the smaller YoY visit surpluses are likely due to comparisons to an already strong end to 2021. Gyms started the quarter strong, with weekly visits in July and August up by double digits relative to both 2019 and 2022. And although Yo3Y fell in September, the comparisons to 2019 still remained mostly positive while YoY weekly foot traffic stayed strong.
The fact that Yo3Y weekly visits have remained positive throughout most of September may indicate that the increased interest in health and wellness spurred by the pandemic is still impacting consumer behavior.
In the Fitness space – like for Discount & Dollar stores – the Yo3Y visit gains are unevenly distributed. Crunch Fitness and Planet Fitness – two of the leading value-priced fitness clubs – both saw significant Q3 visit increases relative to both 2021 and 2019. LA Fitness’s Yo3Y visits appear to be down, but much of that is due to the company’s rebranding of many former LA Fitness clubs as more budget-friendly Esporta – just in time to cater to consumers’ current value orientation. At the same time, YoY and Yo3Y foot traffic to Anytime Fitness are both up, which indicates that non-budget clubs can also drive success in the current climate.
Other gym brands, such as 24 Hour Fitness, and Gold’s Gym, have seen drops in their Yo3Y visit numbers due to their fleet consolidation efforts over the past two years. But YoY foot traffic to both 24 Hour Fitness and Gold’s Gym increased in Q3, indicating that these companies have successfully rightsized – and the appetite for Fitness is still strong.
Superstore foot traffic has fallen from its pandemic-era peaks but remains elevated relative to a pre-pandemic benchmark, which means that the YoY declines are likely primarily due to a regression to the norm and do not reflect any real weakness. The weekly visit breakdown also shows a particularly pronounced Yo3Y increase between early August and early September, indicating that superstores fared well during this year’s back to school season.
Although Yo3Y visit growth appeared to taper off towards the end of the quarter, foot traffic still remained mostly on par with both 2019 and 2021 levels, placing the category in a strong position ahead of its critical Q4 holiday season.
Target continues to lead in the Superstore sector, with Yo3Y visits up 14.1%. But even Target saw a drop in YoY visits in Q3, indicating that the declines relative to 2021 is likely the product of consumer behavior still normalizing post-COVID rather than any real loss in strength.
The three leading wholesale brands, Costco Wholesale, Sam’s Club, and BJ’s Wholesale,e – also saw Yo3Y increases coupled with YoY decreases in Q3, indicating that the inflation-driven bulk buying behavior may not be as widespread as the COVID-induced hoarding.
Meanwhile, foot traffic to Walmart’s, – America’s largest superstore – has remained relatively consistent, with decreases of only 0.9% and 2.4%, respectively, on a YoY and Yo3Y basis. The slight drops may be partially due to several store closures in Q2 2022 as the company increases investment in its digital channels.
Although all the Superstore brands exhibited YoY declines in Q3 2022, the visit drops may not necessarily reflect a drop in purchases. As families and individuals look for ways to stretch their budgets and reduce their expenditures, more and more consumers are buying in bulk – which means that shoppers need to make fewer visits to the grocery store but are filling larger baskets on each trip.
Analyzing Target and Walmart’s visit duration times over the past sixteen months seems to affirm this shift. In Q3 2022, the median length of stay for Walmart and Target visitors was longer than the median length of stay in Q3 2021, and significantly longer than the length of stay in Q1 and Q2 2022. The longer median length of stay combined with the decrease in YoY visits means that shoppers are taking more time to fill up their carts – which is consistent with an increase in bulk shopping.
The pandemic shut down restaurants, so many people stuck at home began spending more time in the kitchen, which drove significant Grocery foot traffic in 2020 and 2021. Now, Grocery visits have come down from their pandemic peaks, but weekly foot traffic to the category remained elevated relative to 2019 – at least during the first half of Q3 2022.
Towards the end of August, however, Yo3Y Grocery visit growth slowed down – perhaps a result of the significant increase in food prices – but foot traffic still remained relatively close to 2019 levels. Perhaps the Grocery category’s pandemic boost meant that the sector had a visit buffer that absorbed the current inflation-driven decline in visits without dipping too far below its pre-pandemic threshold. It is also important to note that the decrease in YoY visits doesn’t necessarily reflect a decrease in purchases – many consumers are stretching their budgets by buying groceries in bulk, which may be bringing the visit numbers down without necessarily impacting basket size.
While some Grocery brands, such as Aldi, Food Lion, and Trader Joe’s, have continued to see elevated visits relative to Q3 2021, foot traffic to most Grocery chains has come down from its pandemic peaks – while still remaining above 2019 levels. The YoY visit decrease is likely due to a combination of a post-pandemic regression to the norm along with a reaction to the rising grocery prices. The Grocery inflation could be driving similar consumer behavior to that seen in the superstore sector, as shoppers buy in bulk and so reduce their visit frequency while increasing their median visit duration.
Throughout July and early August, foot traffic to fast food and QSR venues tracked closely with both 2019 and 2021 levels,but mid-August to the end of September brought significant Yo3Y weekly visit declines even as YoY numbers remained steady.
Some of the decrease may be due to comparisons to the particularly elevated visit levels during the “Chicken Wars” August of 2019. But the Yo3Y declines may also indicate that, with QSR prices still rising, many consumers are increasingly affected by inflation more acutely and are now cutting back even on affordable splurges like fast food.
McDonald’s usually fares well in the face of economic headwinds, and 2022 is no exception – the company has seen its Q3 visits increase on both a YoY and Yo3Y basis. Other brands that saw strong visit trends over the pandemic, such as SONIC Drive-In, are still holding on to some of their success while coming down from their 2021 peaks.
But many leading QSR chains along with the wider dining sector are still recovering from the impact of social distancing. Chick-fil-A succeeded in beating its Q3 2021 visit levels but visits still lag behind 2019 foot traffic count, while Wendy’s and Taco Bell posted both YoY and Yo3Y declines in Q3 2020. This means that, like in several other key retail sectors, looking beyond the QSR category average to individual brand performance highlights how brands are getting stronger, while other companies continue to work towards a post-COVID recovery.
Full-service and fast-casual Restaurants were one of the hardest hit categories during COVID, and the large number of permanent closures over the past two years means that the sector will likely need several years to reach its pre-pandemic visit levels. The data also shows that YoY weekly visits are trending up, but the shrinking visit gaps may be the result of a more favorable comparison to 2021’s Delta-plagued late summer and fall.
All in all, after bearing the brunt of the COVID lockdowns, full-service and fast-casual Restaurants are again disproportionately impacted by the current economic climate. But there is hope that Q4 may bring some relief to the category as the festive holiday spirit drive leads more people to celebrate the season by eating out together.
While the Dining category as a whole is still working towards a post-COVID recovery, some brands are beating the curve – and even seeing their foot traffic rise relative to previous years. Fast-casual leader Chipotle has been on a growth streak for a while, and the brand continued over-performing in Q3 2022, with visits up 21.1% and 8.7% relative to Q3 2019 and 2021, respectively. Full-service Restaurants Texas Roadhouse also had a strong third quarter marked by both YoY and Yo3Y visit growth.
Meanwhile, Olive Garden and Applebee’s both saw YoY and Yo3Y visit declines, but remained ahead of the category benchmark, with Olive Garden and Applebee’s posting a 3.6% and 0.7% YoY visit drop, compared to the sector-wide drop of 4.1%.
Malls made one of the most unexpected post-lock down rebound over the summer of 2021, but the subsequent COVID waves, gas hikes, and inflation concerns hampered the category’s recovery trajectory. Still, shopping centers have continually proved their resilience and ability to reinvent themselves in the face of changing consumer preferences, so there's good reason to believe that the current visit declines are just a hiccup within a larger comeback story.
The next quarter will be critical in assessing the Malls category recovery trajectory. Some budget consumers have already started their holiday shopping and may be turning to malls in the hopes of finding bargains driven by retailers looking to offload excess inventory to make room for new holiday merchandise. Black Friday may also prove more of a draw this year as consumers continue looking for ways to stretch their budgets. Finally, the return of mall Santas and other holiday events may also drive even more visits to shopping centers as throughout November and December approaches.
While the category as a whole is still working on returning to its pre-COVID strength, some Malls have found ways to not only recover but thrive despite the difficult circumstances of the past few years. From California to Michigan to Vermont, shopping centers have found ways to attract visitors and grow their foot traffic not just in relation to 2021, but even relative to 2019 levels.
The success of these malls is a testament to the fact that malls that innovate and provide their visitors with real value by offering a balanced mix of shopping, entertainment, and dining options can still attract high visit numbers – even under challenging circumstances.
After hitting an all-time high towards the end of Q2 2022, gas prices began falling in Q3, but persistent inflation continued impacting retail foot traffic. And due to difficult comparisons to a particularly strong summer and Back-to-School season in 2021, foot traffic data does show some year-over-year (YoY) foot traffic declines across some key categories.
At the same time, taking a wide view of the retail landscape presents a relatively optimistic picture. Several sectors are thriving, while even within categories that are facing bigger challenges, many brands are successfully maintaining a growth trajectory. And with the holiday shopping season already underway, Q4 2022 may well provide a larger-than-usual boost to many of these critical sectors.
Discount & Dollar stores are holding on to their pandemic gains as the current climate continues to favor these value-driven retailers.
Offline Fitness continues to thrive, with the increased interest in health and wellness spurred by the pandemic likely still impacting consumer behavior.
Grocery visits fell slightly compared to 2021, but the category’s pandemic boost created a visit buffer that absorbed the decline without dipping too far below its pre-COVID threshold.
Superstore foot traffic still remained mostly on par with both 2019 and 2021 levels, placing the category in a strong position ahead of its critical Q4 holiday season.
QSR visits tracked closely with 2021 levels, but fell relative to 2019, which may indicate that consumers are increasingly impacted by inflation and foregoing even small splurges.
Full-service and fast-casual restaurants were one of the hardest hit categories over COVID, and the sector is now bearing the brunt of inflation,but visits may rise over Q4’s holiday season.
Malls have continually proved their resilience and ability to reinvent themselves in the face of changing consumer preferences, with top-performing malls seeing more visits than in 2019.
