Elevated Gas, Food Prices Take a Toll on Retail Foot Traffic

As the U.S. continues to grapple with fluctuating gas and food prices, a report from analytics firm Placer.ai is shining a light on how those are affecting retail visitation trends. While more consumers are returning to in-store shopping as prices level out, Placer.ai predicts a continued effect on overall retail traffic. 

For the week of March 7, the study found that overall retail visits were down 4.3% below the same time period three years ago, but there was a slight lift during the week of March 14. Despite the bounce back, Placer.ai’s RJ Hottovy anticipates a continued impact on shopper trends. 

“Should current trends continue, the rise in retail gas prices is likely to continue to weigh on overall retail traffic – particularly on those retailers that have greater exposure to lower-income consumers where gas makes up a higher percentage of household budgets,” wrote Hottovy. 

While consumers haven’t made a major switch between shopping channels – grocery, superstore and dollar and discount stores – Hottovy predicts that there could be a return to mission-driven shopping trends that favor retailers with an array of goods. The increase in gas prices and subsequent decrease in gas station foot traffic support Hottovy’s prediction. 

One warehouse retailer expected to benefit from current retail and gas trends is Costco Wholesale, which is often known for cheap prices at its 640 North American gas stations. 

“Foot traffic data indicates that Costco Gasoline bucked the trend and saw a meaningful acceleration in year-over-year visitation trends this past week,” Hottovy wrote. “As elevated gas prices drive consumers to consolidate their shopping trips and turn towards one-stop-shops, Costco seems well positioned to benefit twice from the current situation.” 

Issaquah, Wash.-based Costco operates 809 warehouses worldwide. The company, which is No. 4 on Progressive Grocer’s 2021 PG 100 list of the top food and consumables retailers in North America, also has e-commerce sites in the United States, Canada, the United Kingdom, Mexico, Korea and Taiwan.