The home improvement and home goods sectors have been among the strongest in retail throughout the pandemic. When COVID initially hit, home improvement leaders like Home Depot and Lowe’s benefitted from essential retail status allowing consumers to embark on DIY projects with their newfound time at home. Visits in Q1 2021 for the sector were up 22% year over year when compared to the same period in 2020. This was actually the largest visit increase over the last four quarters, something that can be attributed to both Q1 not being a normal peak period for the sector, and the comparison to 2020’s dip in March.
More than almost any other sector, the restaurant industry suffered one of the hardest COVID-19 hits. Yet, location data provides a hopeful sign of recovery across dining segments, with some, like the QSR and coffee sub-sectors, expected to reach a full recovery faster than others. The change that the pandemic brought to the daily schedules of many impacted the various dining segments differently. Those relying more heavily on daily routines, like the coffee and breakfast space, were affected more. But despite the differences, there was one strong pandemic-related trend experienced by all segments – a significant rise in the overall proportion of mid-day visits. As flexible work became more common, mid-day lunch outings to a local cafe or restaurant – either as a short escape from the work-from-home monotony or as a refreshing place to work for a few hours – became a more valuable asset.
Unsurprisingly, malls were hit especially hard by COVID with visits declining dramatically in the spring before beginning a slow comeback to normalcy in May and June. Yet, there are real reasons to believe that the sector could see a strong revival in 2021. Looking at an index of over 50 top tier malls throughout the country shows the steady pace of return that the sector saw throughout the summer. Following a dip in November as COVID cases surged a week before Black Friday’s shopping peak, the sector recovered with year-over-year gaps shrinking each month from November through January.
With 2020 behind us and signs of recovery abound, we checked back in on the travel industry to see how it’s been rebounding thus far and what 2021 could have in store for hotels and airports. Last time we checked in, visits to airports were rebounding at the end of the year following the holidays, and that progress continued into 2021. Almost every airport showed year-over-year growth from the end of 2020 into the new year. Only DFW airport in Dallas showed an increase in the year-over-year gap between January and February – likely because of the unprecedented weather the state experienced at the beginning of the new year.
In this Placer Bytes, we break down the latest performances of two home furnishings leaders – Bed Bath & Beyond, and Conn’s, and analyze Amazon’s latest grocery push. There were fairly widespread concerns just a few years ago that Bed Bath & Beyond’s long-term prospects were anything but rosy. But, the brand saw a strong year that was only expected by a handful of observers. And it looks like that strength could continue into 2021. After seeing visits decline steadily week over week following a peak in mid-December, visits began to steadily rise again after a wave of inclement weather that hit across the US in late January and early February. By the week beginning March 15th, visits had risen 15.1% week over week.
Grocery was one of the stronger performers throughout the pandemic, and there is real reason to believe that sector could be heading into an extended period of strength. However, the coming year is going to be defined by a high degree of complexity when attempting to measure the performance of top grocery brands. Year-over-year analyses are an especially useful tool to account for seasonality and understand brand strength over time. As a simple example, you’re more likely to visit an ice cream store when it’s hot so looking at said parlor in June year over year will tell far more than looking at the same June month compared to the January or March that preceded it. But 2021 is going to be mired in the unique challenge of trying to make sense of certain sectors in a world where year-over-year data could be heavily misleading.
As a result of the pandemic, there has been a significant shift happening in major cities with many, if not most, seeing an exodus of residents. This has led some to speculate that the impact on city-oriented retail could be especially severe. Looking at net change in populations across some of the larger CBSAs in the country shows a clear pattern of decline. In January 2021, the New York CBSA saw a year-over-year difference of -1.2%, while San Francisco, Los Angeles, and Boston saw declines of 2.4%, 1.9%, and 1.7% respectively. While these drops are not massive, they are heavily offset by new residents making their way to fill gaps in these areas. And there are powerful indications that what is truly taking place is less about an exodus than a revival.
In this Placer Bytes, we dive into the recent recovery data from pharmacy leaders CVS and Walgreens and analyze their potential in the coming months. Visits to Walgreens, Rite Aid and CVS locations were trending in a very positive direction in late 2020. While the sector saw the same dip that other retailers did because of a resurgence of COVID cases, by December visits were again moving in a positive direction. CVS saw monthly visits down just 2.7% year over year, while Walgreens and Rite Aid were down 6.2% and 24.2% respectively – marking the lowest visit gap for Rite aid since the start of the pandemic.
While the change in migration during COVID was not as dramatic as some expected, even small shifts in migration patterns could have major implications for strategic business decisions. The way Americans move can impact the way retailers reach their audiences, which office space strategies top employers must utilize, and how cities and regions drive key tax revenue. State-level migration data shows that the population change that most states experienced between January 2021 and the previous January did not exceed 1%. This limited net change shows the ‘stickiness’ of a home area, which is heavily influenced by work, family, schools, the cost of living, and more.
In this Placer Bytes, we dive into At Home’s continued strength, the recoveries of Lululemon and Nike, and recently announced off-price expansions. Since early spring, At Home has been one of the most impressive brands in retail cashing in on the home furnishings surge that has lasted into 2021. The brand saw year-over-year growth deep into 2020 with visits in November, December, and January up 19.6%, 3.5%, and a massive 43.3% respectively. And while February did see a 1.1% dip year over year, the situation is hardly ‘bad’ with the month seeing fewer overall days than a year prior.
In this Placer Bytes, we provide critical context for a difficult February and break down the latest beneficiary of the Chicken Sandwich. February was a tough month for offline retail with a combination of multiple instances of extreme inclement weather throughout the country, continued COVID effects and one fewer day limiting the overall monthly output. This led to weeks in February where several categories hit low points they hadn’t seen since the summer, and in some cases, early June. While this is hardly a positive note for the wider offline retail space, once again, an immediate recovery began following the dip. By late February, visits were again back on the rise.
We checked back in on some of Darden Restaurants’s top brands to see how the recovery is going thus far into the new year. When looking at year-over-year visits from early 2020, it’s clear that Darden was poised for a strong year, with four of its top restaurants showing year-over-year growth in both January and February 2020. The Yard House was leading the way with year over year visit increases of 14.1% and 22.7% respectively for those two months, but Olive Garden, Cheddar’s and LongHorn Steakhouse were seeing very impressive jumps.
In this Placer Bytes, we look at two of retail’s strongest in Five Below and Michaels and break down the potential for a Belk recovery. Five Below is among the most interesting brands to watch as it is seeing exceptional offline strength heading into a period where its value offering could be even more attractive. Following a dip in year-over-year visits driven by the pandemic, the brand quickly saw visits return to year-over-year growth by July 2020.
In this Placer Bytes, we dive into Ulta’s performance, Sephora’s expansion plans, and the continued rise of Citi Trends. It’s becoming increasingly clear that Ulta resides in a stratosphere reserved for retail’s top players. After delivering a very strong 2020, especially considering the context, the brand had one of the fastest starts to 2021.
In this Placer Bytes, we dive into the performance of Dick’s Sporting Goods and break down the newest addition to the Tractor Supply kingdom. Dick’s Sporting Goods is an especially impressive brand and the company’s offline recovery was – even amid COVID circumstances – certainly predictable. But the period from November 2020 through January 2021 may actually be one of the strongest testaments to the brand’s unique reach. Dick’s saw visits decline 30.5% year over year in November as holiday visits were hammered by a resurgence of COVID cases.
In this Placer Bytes, we dive into Dollar General’s continued strength and the recoveries of Gap and Old Navy. Dollar General has seen exceptional growth in the last year with every month since January 2020 showing year-over-year increases. And while the jumps themselves are good enough, it’s the continuity of these increases that makes them all the more impressive. Even as COVID cases surged in November, visits continued to remain up 8.9% year over year, and this continued with December and January up 5.3% and 7.5% respectively.
Prior to the pandemic, Costco has been among the most consistently strong performers in all of retail with year over year visit growth essentially a given. On the other hand, BJ’s Wholesale had been the clear third wheel in the battle for wholesale club supremacy. Yet, since the pandemic, visits to the former have been up and down, while BJ’s has been one of the most impressive players with near ongoing year-over-year growth. So what does it all mean and how did traffic unfold in late 2020 and January 2021?
In this Placer Bytes, we dive into a critical lesson from Burlington’s recovery, the rebound potential for Nordstrom, and the opportunity for Dollar Tree. When Burlington removed its eCommerce capabilities the wider retail community was up in arms. This wasn’t helped by the onset of a pandemic that shut down Burlington locations, leading some to assume that it would affect Burlington in the long-run.
In this Placer Bytes, we break down Target and dive into Kohl’s and Ross. It may be stating the obvious at this point, but Target seems poised for an exceptionally strong year. After seeing visits hover just under 2019 levels for most of the spring and summer, September and October drove visits that were up 2.6% and 5.2% year over year. Yet, like most other retailers, the resurgence of COVID cases impacted visits driving a year over year visit gap of 8.5% in November and 5.4% in December.
In this Placer Bytes, we dive into the surprisingly strong performance of Best Buy, Big Lots ongoing opportunity, and the trajectory of Sprouts and Kroger. A resurgence of COVID cases right before Black Friday should spell doom for a brand that is heavily oriented around that specific day. Yet, while Best Buy certainly felt the impact in offline visits, the company seems to have weathered the storm quite effectively.