Retailers are grappling with staffing challenges and the impact of rising interest rates. Despite this, some retailers are expanding their footprints, implementing innovative strategies, and capitalizing on changes in consumer behavior to stand out from the rest. According to data from Placer.ai, these retailers are set for success for the remainder of 2023.
A few brands set to outperform on this year’s retailers’ watch list include:
- Bath & Body Works
- Hobby Lobby
- Five Below
- Total Wine & More
- Raising Cane’s
- Planet Fitness
- Hampton Inn
2022 was a successful year for many QSR chains. Chipotle, Chick-Fil-A, In-N-Out Burger, and Starbucks all saw gains in visitation share, and that momentum has continued throughout 2023 and is expected to continue for the remainder of the year. This is attributed to consumers trading down from more expensive dining options and seeking an escape from skyrocketing grocery prices.
A top-performing all-star in 2023 is Chipotle. Nationwide, the chain has 2,764 venues averaging 107,120 annual visits per venue. Overall, Chipotle has seen over 288 million total visits in the last 12 months, as of July 2023.
According to Verdict Food Service, for the quarter ended June 30th, Chipotle’s total revenue rose by 13% to $2.51 billion from $2.21 billion a year earlier.
2022 marked the most Chipotle openings in six years, with 236 new locations, of which 202 included a Chipotlanes drive-thru.
Another retail all-star is Walmart. As consumers seek affordable prices for everyday items, Walmart has been a source of financial relief during a trying market with rising interest rates and inflation. In the last 12 months, Walmart has seen an average of 1.83 million visits per venue, totaling 7.05 billion visits. Additionally, according to Macrotrends, Walmart’s revenue for the month ending April 30th, 2023, was $152.301B, a 7.58% increase year-over-year.
Q4 2022 marked the first-ever $100 billion-plus sales quarter for Walmart, as the retailer dominates in the food, health and wellness, apparel, and automotive categories.
Convenience store (c-store) food is another category seeing success in sales. As c-stores upgrade their food service offerings, new data is proving they may be taking market share from quick-service restaurants. One chain that took the second spot among businesses to watch in 2023 is Wawa, the convenience store and gas station headquartered in Pennsylvania.
Wawa is in the process of expanding its stores in Tennessee, Indiana, Kentucky, and Ohio to have 1,800 total stores by 2020.
Overall foot traffic to Wawa has increased over the past few years, and average visits per venue grew between 34.3 percent and 50.1 percent across all states. In addition, Wawa also has a loyal following which Placer.ai says makes it notable in the year ahead. The Wawa Rewards Program offers customers the chance to earn Wawa Rewards coupons for every $50 spent on eligible purchases at Wawa stores. These purchases can be made using the Wawa App, Wawa Rewards Key Card, or a registered Wawa Gift Card.
The discount and dollar store segment is leading the retail pack this new year. Specifically, Five Below looks poised for a highly successful 2023. Selling a majority of items for $5 or less, as well as a range of higher-priced items, much of the chain’s appeal lies in its position as the go-to discounter for tweens and teens. Joel Anderson, President and CEO of Five Below, says he is determined to prove the store’s merchandising approach makes them resilient during tough times.
Five Below’s monthly year-over-year foot traffic was up by double-digits for most of 2022. This can be attributed to the chain’s impressive expansion, going from 900 locations at the end of fiscal 2019 to 1,413 locations as of July 4th, 2023.
Five Below has set an ambitious target of opening another 1,000 stores by 2025.
On the Radar
Retailers to keep on investor’s radars include Planet Fitness and Hampton Inn. Both chains are connected to leisure and self-care, showcasing consumers’ prioritization of health and travel after the pandemic.
As of July 2023, Planet Fitness has 2,159 venues averaging 458,530 visits per venue. In the last 12 months, Planet Fitness has had 970.1 million visits.
Planet Fitness ended 2022 with 17 million members nationwide.
Another top performer on the watch list is Hampton Inn by Hilton. In the last 12 months, the hotel chain has averaged 87,680 visitors per location, with a yearlong total of over 198 million visitors. Peak months included December through February, attributed to a rise in holiday travel.
Hampton inn was ranked number one in the hotels & motels category of Entrepreneur Magazine for 2022, for the 14th year in a row.
With a looming recession and an inconsistent inflation rate diminishing consumer confidence, brick-and-mortar retailers continue to face a wide array of challenges for the remainder of 2023. The consumer has shifted their focus to value. Winners will be QSRs and c-stores that provide a quick, satisfying, inexpensive meal, soft goods retailers that provide essentials or branded goods at a discount, and wellness groups that allow customers healthy and value-focused experiences and inclusivity. Chipotle, Wawa, Walmart, Five Below, Planet Fitness, and Hampton Inn all provide value in these categories, backed by rock-solid balance sheets and strong governance. They will continue to expand their capture of consumer wallets for the foreseeable future, recession or not.