Placer.ai sizes up superstores’ 2023 performance
How did Target, Walmart, Costco, Sam’s Club and BJ’s Wholesale Club perform offline last year? Who visited the chains in 2023? And what does 2024 have in store for the space? A Placer.ai report dove into the foot traffic and trade area composition data to find out.
According to the report, the superstore and wholesale space performed well across the board in 2023, with leading retailers seeing consistent year-over-year quarterly visit growth throughout the year. Costco led the pack in terms of overall YoY visit performance, followed by Sam’s Club and BJ’s Wholesale Club. The wholesale clubs’ strength may be due in part to the chains’ attractive gas prices, which were likely particularly tempting to 2023 consumers looking to stretch their budget.
Visits to Target also remained above the chain’s 2022 baseline during all four quarters, and Walmart – which closed several stores last year – mostly beat its 2022 visit performance, with the exception of Q4 where traffic remained essentially on par with last year’s levels.
Placer.ai sizes up retail sector foot traffic in Q1
Visits to four out of five of the analyzed superstores and wholesale clubs dipped slightly in January 2024 relative to January 2023, perhaps due to comparisons to a strong Q1 2023 performance or to post-holidays consumer cutbacks. But despite the challenging circumstances, the YoY drops remained minimal, so the softer start to the year is not necessarily an indication of things to come.
And in contrast to the subdued visit performance in the rest of the category, Costco foot traffic exceeded its January 2023 visit baseline – revealing the potential for the superstore space to grow in a positive direction in 2024.
Analyzing monthly visits to leading superstore and wholesale clubs in 2023 compared to each chain’s monthly visit average reveals different consumer patterns for each brand.
While all chains saw their monthly visits peak in December, Target experienced the most significant holiday peak, with a 33.9% increase in monthly visits compared to its 2023 monthly average – more than double the increases of the other four chains analyzed. Target also saw the strongest August visit growth relative to its 2023 monthly average as parents and students likely flocked to the chain in search of back-to-school apparel and supplies.
In June and July, Walmart’s relative visit growth exceeded that of the other four chains – possible thanks to consumers stocking up on summer supplies. And the wholesale clubs saw larger relative increases in November, as those chains’ bulk grocery offerings may have helped consumers shop for a crowd ahead of Thanksgiving dinner.
[Read more: Placer.ai sizes up consumers' spending habits amid inflationary prices]
Who shops at superstores and wholesale clubs?
The trade areas of all five chains analyzed included a higher share of households with children when compared to the nationwide average. But the two superstore brands – Walmart and Target – also had larger percentages of one-person and non-family (roommate) households when compared to the nationwide average, while the three wholesale clubs had smaller shares.
While average wholesale clubs and their large selection of bulk packaged items cater primarily to families, superstores seem to attract a wider range of shoppers, including consumers shopping for one and living alone or with roommates.
Diving into the psychographic composition of the trade areas highlights additional differences between the various chains’ audiences.
The trade areas of Walmart and of its subsidiary Sam’s Club had the highest share of Spatial.ai: PersonaLive’s small town and rural audience segments, including “Small Town Low Income,” “Rural Low Income,” “Rural Average Income” and “Rural High Income.”
Suburban segments were more distributed. Walmart and Sam’s Club served a higher share of “Blue Collar Suburbs” while Target and Costco drew more “Wealthy Suburban Families” – and BJ’s Wholesale Club received the largest percentage of “Upper Suburban Diverse Families.”
BJ’s trade area also included the largest shares of almost all the urban segments with the exception of “Educated Urbanites” – defined by Spatial.ai as “well educated young singles living in dense urban areas working relatively high paying jobs” – for which Target came out on top.
Superstore and wholesale clubs performed well in 2023, as consumers relied on their bulk-packaging and value-pricing to stretch their increasingly strained budgets.
To find out what's in store for 2024, visit here.