Image: A Five Below store in Kingston, N.Y., photographed in February.
Table Content:
Retail foot traffic in the United States saw a modest increase of 0.4% in 2024 compared to 2023, according to Placer.ai data. This growth reflects shifting consumer preferences and economic conditions throughout the year, with discount retailers initially leading the way, followed by a resurgence in grocery and big-box stores. What do these trends suggest for the retail landscape in 2025?
Shifting Consumer Preferences Drive Foot Traffic Trends
Early 2024 witnessed a surge in foot traffic for discount and dollar stores like Dollar General and Five Below, driven by consumer concerns about inflation and economic uncertainty. This trend aligns with the broader narrative of value-seeking behavior among shoppers facing financial pressures. However, this momentum shifted as the year progressed.
Superstores and Grocery Chains Gain Momentum
As consumer sentiment improved and inflation began to cool, superstores and grocery chains experienced a notable increase in foot traffic during the second half of 2024. Major retailers like Walmart and Target, often frequented by higher-income households, benefited from this shift. This suggests that as economic concerns eased, consumers felt more comfortable spending on a wider range of goods, including groceries and discretionary items. Competitive pricing strategies adopted by these larger retailers also likely contributed to their increased appeal.
Furniture Sector Rebounds in Late 2024
The furniture sector, which experienced a decline in foot traffic at the start of 2024, saw a significant rebound in the fourth quarter, with a 3.5% year-over-year increase in visits. This late-year surge indicates a renewed consumer interest in home furnishings and likely reflects growing confidence in the economy and personal finances.
Economic Outlook and 2025 Predictions
The National Retail Federation (NRF) reported strong overall spending in 2024 despite periods of wavering consumer confidence. The recent rebound in sentiment, coupled with cooling inflation, has fueled optimism for the retail sector in 2025. Placer.ai echoes this positive outlook, suggesting that these factors could contribute to sustained retail growth in the coming year. The NRF’s chief economist, Jack Kleinhenz, expressed confidence in the resilience of the American consumer, highlighting it as a key driver of continued economic growth.
Conclusion: A Positive Outlook for 2025?
The 2024 retail foot traffic data reveals a dynamic landscape shaped by fluctuating economic conditions and evolving consumer preferences. The initial dominance of discount retailers gave way to a resurgence in superstores, grocery chains, and furniture stores as the year progressed. While economic uncertainty remains a factor, the overall positive trend in consumer sentiment and spending, combined with cooling inflation, suggests a promising outlook for the retail sector in 2025. This analysis underscores the importance for retailers to adapt to changing consumer needs and economic trends to maintain competitiveness and capitalize on growth opportunities.
