Consumer Behavior

Retail foot traffic on healthy path

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May 29, 2023

Foot traffic has increased when it comes to retail locations as consumers are prioritizing shopping when it comes to discretionary spending.

That's a top finding from the Q1 Consumer Trends Report released by Gravy Analytics, which provides enterprise location intelligence.

The research data comes at a time when U.S. economic growth in the first three months of 2023 was faster than expected, according to a CNN report.

The Gravy Analytics report analyzed foot traffic data from Q1 2022 to Q1 2023 to assess how consumer behavior is changing across industries, according to a press release.

"Insights from the Q1 2023 report indicate that consumers are finding room in their budgets for shopping, though prioritizing more affordable retailers, and dining out with their families across a variety of restaurant types," Jeff White, founder and CEO of Gravy Analytics, said in the release. "However, consumers are being more selective with their budget when it comes to spending on accommodations, possibly due to ongoing concerns over travel disruptions, rising gas prices and increased hotel rates."

Gravy's report revealed visits to shopping-related destinations were up 20% in Q1 2023 compared to the same period last year.

Seeing the biggest increases in foot traffic in Q1 2023 were arts and craft supply stores (40%), department stores (34%), outlet malls (32%) and shopping centers (31%).

Although there was an unexpected dip in foot traffic to department stores in Q4 2022 despite the holiday shopping season, consumers returned to these retailers in Q1 2023 with the majority of brands seeing foot traffic rise above Q1 2022 levels.

The report found that upscale department stores such as Neiman Marcus and Nordstrom were beat out in terms of consumer foot traffic by more affordable alternatives such as Kohl's, Nordstrom Rack and Macy's.

"Based on our findings, consumer discretionary spending is slowly beginning to recover, and Q2 2023 is likely to see consumers continue to explore ways to get out with their families whether that be shopping, dining or other activities," White said in the release. "With graduations, school breaks and the beginning of summer ahead, it will be interesting to see if accommodations achieve increased foot traffic or if consumers continue to prioritize spending closer to home."