With the first half of 2024 officially behind us, it’s time for retailers to look forward to and prepare for the shopping trends to come in H2. Understanding which strategies worked well in the first half of the year is crucial to succeed in the future.
RetailWire and Placer.ai hosted a webinar last week, focusing on a retail review at the halfway point in 2024 and offering key insights, pivots and future predictions for the second half of the year. We’ve summed up the webinar for you in this article to help you plan ahead.
Inflation Continues to Impact Consumer Shopping
RJ Hottovy with Placer.ai stated that while visitation trends ranged across different retail categories, discount and dollar stores had the highest visits in H1 2024 compared to H1 2023. “Particularly among lower income consumers, they’re looking for value,” he said. “Consumers are still being very mindful about their purchases.”
The home improvement and home furnishings category saw the lowest number of visits in H1 2024, according to Hottovy. Especially coming out of the pandemic when consumers were most active with home projects, the category has continued to shrink over the last few years.
Despite this, Hottovy noted that there is still room for retail and dining growth. “We did see a lot of people move out of big cities during the pandemic period, but now young consumers are coming back and finding places that weren’t available to them five years ago,” he said. “Due to this migration, there is room for growth again. And categories such as smaller housework and mattresses are seeing different growth pockets across the U.S.”
Competition Between Restaurants and Grocery Stores
While the dining category has been experiencing a downward trend, grocery retail has seen an uptick, according to Hottovy.
“Dining is seeing increased competition from both grocery and discount dollar stores. I can’t remember a time like this in the food retail landscape,” he noted. “The past six months alone have been some of the most competitive. There’s a lot going on.”
Hottovy explained that during the past 12 months, consumers have been gravitating away from restaurants due to food inflation and increased prices across the board. Value-conscious shoppers are realizing they can get a better value at grocery and dollar stores.
“We will continue to see things get more competitive as fast food chains try to offer better deals. And grocery stores may take advantage of that, as well,” said Hottovy.
With shoppers on the hunt for the best deals, value grocers are leading the grocery industry. According to Hottovy, Aldi has seen the most growth year over year, followed by Trader Joe’s, H-E-B, Food Lion, ShopRite, Safeway, Kroger and Albertsons.
Shopping Center Recovery
Surprisingly, shopping centers are seeing a comeback, with malls experiencing a strong H1 2024. Hottovy explained that this trend is due to the way malls have been pivoting the last few years to include more entertainment experiences instead of just retail shops.
“We’ve seen positive growth nationwide for shopping centers this year,” he said. “Different categories are performing better than others, but malls are doing quite well overall. Open-air malls, in particular, have seen positive growth the last few months.”
Looking Ahead to H2 2024
Even though consumer shopping preferences continue to shift, Hottovy expects H1 trends to continue through the second half of 2024 and is cautiously optimistic about the rest of the year.
“It looks like we’re on a nice, steady acceleration year over year,” he said. “As food inflation moderates, that’ll free up discretionary spending for other categories. With more people returning to the office, they’re interested in refreshing their work attire. We also expect to see a spike as consumers upgrade different home office items and electronics, so I think we’ll see a positive second half of the year.”
