Inflation Taking a Bite Out of Grocery Store Foot Traffic
Overall traffic is down as consumers are feeling “pinch at checkout” and seek value-oriented chains.
Some dine-out foot traffic trends have been trampled since the pandemic as consumers have shifted to eating at home, brought on additionally by inflation. But even grocery stores are not proving to be immune to the effects of higher prices.
Not surprisingly, when Placer.ai looked at regional trends among grocers it found that value-oriented grocery chains – brands such as Aldi, Lidl, Walmart Neighborhood Market, Save-A-Lot, and Grocery Outlet Bargain Market – have successfully increased their foot traffic.
Overall, though, foot traffic is down for grocers as prices spiked in the first half of 2022, as grocery shoppers nationwide “felt the pinch at the checkout,” Placer.ai said in a report.
“While food-at-home inflation has somewhat influenced grocery store visitation trends across most markets, the magnitude of that inflation doesn’t appear to be a strong indication of grocery store visits,” wrote RJ Hottovy.
Grocery Visits Decreasing
Placer.ai data shows that grocery visits are decreasing as food-at-home CPI is increasing, but the impact of the increase in food-at-home prices is not consistent across regions.
In Atlanta, food-at-home inflation is slightly below the national average in June – 11% versus the national average of 12.2% – yet visit data shows a YoY decline of 4.6% compared to the moderate 2% average decline nationally.
The report said that other markets such as San Francisco and Los Angeles saw YoY visit growth even as food-at-home CPI climbed above the national average, indicating other factors beyond prices – perhaps the high cost of eating out in these markets– are at play.
“While many of these markets saw a dip in YoY visits in June, we don’t expect inflation to ultimately dictate the sector’s foot traffic performance,” according to Placer.ai’s report. “As mentioned, our analysis showed YoY growth for grocery in Q2 2022 and we expect that trend to continue as consumers look to save money by eating at home.”
Despite the challenges posed by inflation, foot traffic data shows that grocery visits rose in Q2 2022 on a quarter-over-quarter (QoQ) as well as year-over-three-year (Yo3Y) and YoY basis.