Dollar stores have seen significant foot traffic gains this year, though they lost some momentum in July as customers flocked back to superstores and traditional grocers for food items, according to an analytics firm's report.
Superstores Lead Retail Foot Traffic Gains
Some major store chains are generating plenty of foot traffic even as inflation runs near a 40-year high.
A report this week from traffic analytics firm Placer.ai shows superstores, generally those spanning more then 100,000 square feet with a mix of general merchandise and groceries, were among the biggest foot traffic winners during July, rising 7.5% from their March levels.
Superstores and traditional grocery stores, where visits rose 6.6%, apparently benefited at the expense of dollar stores, which had led traffic growth tallies in 2022. These stores still saw a rise of 3.2% in visitors in July compared with March.
One possible factor is that shoppers are falling back on more traditional stores with a wider selection of groceries than are found in dollar stores, though the deep-discount chains have been increasing sales with enhanced food offerings during the pandemic. Placer.ai analysts noted dollar store traffic remains up considerably from three years ago.
“Consumers who shifted their grocery shopping to dollar stores following the initial gas hikes and inflation reports may now be returning to superstores and grocery stores to purchase fresh fruits, vegetables and other items that are harder to find at discount stores,” Placer.ai content manager Shira Petrack said in a statement.
Placer.ai reported that consumers chasing bargains still took time during July for escapes to movie theaters, where visits increased 72% from March, and also splurged at beauty product stores and day spas, with traffic up 4.5%. Beauty-related visits, in fact, rose 27% from pre-pandemic July 2019, benefiting chains such as Ulta Beauty, Massage Envy and Buff City Soap.
Jobless Claims Rise
Initial claims for unemployment insurance totaled 262,000 for the week ended Aug. 6, rising 14,000 from the prior week, the Labor Department reported Thursday. The four-week moving average for initial claims was 252,000, up 4,500 from the prior week.
Total of continued weeks’ claims for all programs, tracked on a more delayed basis, was approximately 1.5 million for the week ended July 23, up 9,206 from the previous week. That number was still well down from the approximately 12 million claims for the comparable week of 2021.
The nation is still producing jobs at a healthy clip, with layoffs remaining muted in most industries, as the U.S. unemployment rate declined to 3.5% in July from 3.6% in June, the Labor Department reported last week.
Producer Prices Slip
Producer prices, which contribute to consumer inflation, fell 0.5% in July from the prior month, the Labor Department reported Thursday. Producer prices are still up 9.8% from a year ago, partly because of pandemic supply chain disruptions and rising costs for labor and supplies.
The month-to-month decline was aided in part by a 9% drop in energy-related costs, with gasoline prices falling 16.7%.
Largely with the help of declining gas prices, annual consumer inflation dropped from 9.1% in June to 8.5% in July, the department reported this week.
Producer price inflation is considered an important indicator for the overall industrial economy and can influence property demand. Some analysts have said that Federal Reserve efforts to tame consumer inflation though hikes in its key lending rate should also help reduce producer price inflation.