Record-high inflation, nationwide layoffs, and other economic disruptions have had a lingering impact on consumerism across the country. As a result, consumers began to prioritize affordable necessities over impulse buys and luxury purchases, leaving retailers like Target, where impulse buys account for 21% of its sales, struggling to keep up. Throughout 2022, Target experienced declines in foot traffic as consumers opted for wholesale and discount competitors like Costco and Walmart in hopes of buying more for less. However, as discretionary spending makes a comeback, how is Target performing compared to competitors? We studied foot traffic to Target and its competitors to find out.
Foot Traffic to Target & Major Competitors
We analyzed year-over-year foot traffic to Target, Walmart, Costco, and Sam’s Club from Q1 2022 to Q1 2023. Overall, Target has experienced an impressive increase in year-over-year foot traffic. At a 32% increase, Target is currently seeing substantial growth in foot traffic while its competitors are not quite keeping up.
Costco saw a 23% increase in year-over-year foot traffic for the time period we analyzed. Meanwhile, Walmart and Sam’s Club both saw foot traffic rise by 11% and 13%, respectively. While all brands experienced growth in foot traffic over the last year, Target stands out as the brand that saw the most growth in foot traffic year-over-year.
Perhaps, as consumers are beginning to spend more freely this year, they will be visiting more locations like Target to shop for sought-after products. Target is known for its lineup of trendy brands and reasonable prices, as well as its enjoyable customer experience, so consumers may be spending more time at stores they enjoy, like Target, to shop for a variety of goods. So, what is Target doing that’s bringing a significant amount of customers through its doors, and will this growth continue?
Target in 2023 & Beyond
Target reported having an overall increase in traffic to its stores last year, and it may be partly due to Target’s shift in stocking less discretionary merchandise, and bringing in more “frequency” category items. This means that, in response to consumer demand, Target likely began incorporating more daily necessities in its stores, continuing to attract customers even during economic uncertainty.
Target’s increase in foot traffic doesn’t indicate a significant increase in sales growth, however. Target’s rising costs of operations, along with persistent inflation, could suggest a future of sales losses. Target may need to plan ahead to avoid these potential losses, but there is still opportunity for growth given its increasing foot traffic. But, how can Target capitalize on this opportunity?
This year, Target’s strategic investments plan may prove successful as it seems the company is planning on emphasizing customer preferences to fuel growth and avoid losses. For example, Target plans to launch 10 owned brands appealing to value-conscious shoppers. It also plans to begin allowing drive-up returns, likely to fuel loyalty and return shoppers. Target’s strategic plans aim to meet a wide range of consumer needs by offering trendy and affordable luxuries, expanding its selection of daily necessities, and enhancing convenience. Foot traffic to Target stores is already on a strong incline, so these changes may amplify this growth.
Shopping in 2023
There are a variety of challenges retailers are facing these days. For example, e-commerce is now competing with in-person shopping destinations, especially after the pandemic when consumerism became mostly digital. Shoppers are also expecting more of their favorite brands, and dislike feeling misunderstood by them. The pandemic demonstrated how quickly consumer preferences can change, and how adaptable businesses must be to remain competitive. With today’s rapidly evolving commercial landscape, retailers will need to offer outstanding shopping experiences and innovative ways of connecting with their audiences in order to stay ahead in 2023.
Sam’s Club, Costco, and Walmart are all retailers that offer consumers a way to get more bang for their buck, but Target offers a more elevated shopping experience and trendy brands that can fill a variety of consumer needs. For these reasons, it makes sense that Target is seeing strong levels of foot traffic and could continue to see significant growth this year.
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