As the holiday season fades into memory, Placer.ai decided to take a look at what kind of visitation trends major mass market and warehouse club stores are experiencing as 2023 begins and determined that Walmart is lagging.
Strong 2021 traffic makes year-over-year comparisons tough, Placer.ai noted,, as pent-up demand and accumulated savings drove an unusually robust season. Visits to Target, Walmart, Costco, BJ’s Wholesale and Sam’s Club slipped in October and November 2022 relative to 2021. By December 2022, however, the year-over-year visit gaps narrowed significantly with all banners seeing traffic more or less on par with 2021, suggesting that mass-market retailers still play a major role in consumers’ holiday shopping and party-prepping routine.
Still, traffic data seems to indicate that the economic difficulties of 2022 have begun to take a toll on consumers as January visits slid for almost all mass market chains analyzed, with the exception of Target, which seems to have generated momentum in the New Year.
Given that 2021 was an unusual year, comparing 2022 performance to pre-pandemic traffic levels can offer a better sense of the sector’s improved position since the pandemic, according to Placer.ai. Although November 2022 visits decreased slightly versus the 2019 month, likely due to the reduced importance of Black Friday, Placer.ai pointed out that year-over-three-year visits in October and December 2022 were up almost across the board.
Target and Sam’s Club enjoyed the biggest gains versus 2019, while Walmart saw the biggest visit slump. Yet location intelligence shows that the current traffic dip is likely just a temporary setback for America’s largest brick-and-mortar retailer.
Walmart’s visit gaps versus 2019 may reflect the impact of the ongoing inflation on the mass-market giant’s consumer base. An analysis of the median household income for residents of the five mass-market chains’ True Trade Areas reveals that Walmart’s trade areas tend to house low-income consumers. The median household income in Walmart trade areas is $54,800. In contrast, residents in BJ’s and Target serve True Trade Areas where residents have a median household income of $62,700 and $63.700, respectively, while the median household income in Costco’s True Trade Area is $70,300.
Placer.ai maintained that the relative figures may have to do with competition, which is greater in the mass-market sector, particularly with the recent expansion of dollar store chains, than in the club sector, where stores are fewer, tend to be more dispersed and lock in customers with membership fees.
Even if Walmart may be going through a temporary visit slump, Placer.ai related, the chain is still the most dominant brick-and-mortar retail player in the United States In 2022, 59% of the total visits to Walmart, Target, Costco, BJ’s and Sam’s Club went to Walmart, slightly lower than the chain’s visit share in 2019.
Cross-shopping trends are even more impressive, Placer.ai asserted. Between 74.4% and 92.1% of 2022 visitors to the other mass-market stores also visited Walmart at least once last year, and between 48.6% and 72.8% also visited Walmart at least four times, for an average of one visit to Walmart per quarter. Between 21.3% and 44.5% of visitors to other mass-market stores in 2022 also visited Walmart at least 12 times last year, for an average of one visit there a month.
