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NEW YORK—Consumers are still shopping, but they are seeking value and spend their time and money with those retailers that offer more for their money.
That was one of the takeaways from a webinar this week that featured insights from Deborah Weinswig, CEO of Coresight Research, and RJ Hottovy, head of analytical research at Placer.ai.
The webinar, titled "Retail Trends and Shopper Traffic Update, Q3: Strategies to Drive Retail Resilience," highlighted some of the winners and losers in the current economic moment, based on store traffic data and the economic performance of retailers.
“We've got a consumer that does want to spend, but doesn't want to spend a lot,” Hottovy said. “Dollar stores, value grocery chains, and warehouse clubs are leading the pack with significant increases in foot traffic.”
He pointed out that the trend is being driven by consumers seeking to maximize their purchasing power amidst economic uncertainty. But it’s not just about low prices.
“Shoppers want unique products at a low price, or differentiated products.”
Restaurants are expected to experience continued pressure in the current economy as value-conscious consumers shift to eating out less and eating at home more. Movie theaters and home improvement stores are among the businesses that are doing less well right now, Deborah Weinswig said, noting that “movie theaters have been hit hard by the lack of tent-pole releases, and home improvement stores are facing a normalization after a pandemic-driven boom.”
The pullback in consumer spending on larger ticket items has been notable, she added, influenced by higher interest rates and a return to pre-pandemic spending patterns.
Consumer Behavior Shifts
One of the most significant insights from the webinar was the shift in consumer shopping habits. The data shows that consumers are now visiting a wider range of stores to hunt for the best deals, rather than sticking to their traditional shopping spots. As RJ Hottovy explained, “People are shopping at a wider number of locations than they ever have before. Visits to chain grocers are up 12%, to convenience stores up 17%, and to dollar and discount stores up 23% compared to pre-pandemic levels.”
This shift suggests the rise of a more strategic and value-focused consumer, one who is willing to spread their shopping across multiple outlets to find the best prices.
The Rise of Private Labels
Another noteworthy trend is the rise of private labels “Private label brands are coming into their own and becoming recognized as brands by the consumer,” Weinswig said. “This has been a significant driver of success for value grocery stores.”
Brands like Costco’s Kirkland have long been popular, she pointed out. But now other retailers are seeing their private labels gain traction and consumer loyalty.
Looking Ahead: Back-to-School and Holiday Seasons
Looking toward the second half of 2024, the upcoming back-to-school and holiday seasons are expected to be pivotal. Retailers are already preparing for early promotions to capture consumer interest and drive traffic. “We’re seeing back-to-school sales starting strong, particularly in value-focused and off-price retailers,” Hottovy remarked.
Moreover, the holiday season is anticipated to follow suit with early and aggressive promotions. “There’s definitely a push to get holiday merchandise out earlier to attract shoppers and boost traffic,” Weinswig noted. This strategy aims to capitalize on the consumer’s willingness to spend during festive periods, despite an overarching focus on value.
