Specialty food retailers could be poised for growth in 2024, according to research from shopper traffic analytics company Placer.ai.
A recent report from the firm shows that some higher-end specialty supermarkets enjoyed strong gains in monthly visits as 2023 came to a close, and also predicted growth among both healthy and indulgent concepts in the foodservice sector. The report cited Uncle Giuseppe’s Marketplace in the New York area, Cermak Fresh Market in Illinois, and Lazy Acres in California as attracting consistent, year-over-year traffic increases. The gains came even as consumers also flocked to more price-driven grocery banners, the report noted.
The specialty chains have been driving traffic from consumers seeking specialty ingredients to recreate restaurant-quality dishes at home, the report said.
“Rising interest in sustainability, natural products, and organic ingredients—especially among Gen Z—likely helped drive traffic growth as well,” added Placer.ai.
In November, for example, monthly visits were up 20.9 percent at Lazy Acres, compared with a year ago; monthly visits rose 10.6 percent at Uncle Giuseppe’s, and monthly visits were up 8.3 percent at Cermak Fresh Market. All three also saw similar increases in September and October.
The report pointed out that the trade areas of all three of these retailers' indices are high for families with children, indicating that their success “isn’t just coming from singles willing to splurge on the latest influencer-backed food trend.” Instead, this could be a sign that families continue to seek out higher-quality, specialty foods as an alternative to the high prices at restaurants, the report concluded.
Indulgence and Health
In the foodservice segment, consumers continue to show strong interest in fried chicken concepts, as well as healthy dining alternatives and small indulgent treats, such as doughnuts and specialty coffees.
Restaurants that focus on offering whole, healthy foods made from scratch appear poised for ongoing growth in 2024, according to the report. Monthly visits at Mendocino Farms, Honeygrow, and Crisp & Green were up in double digits throughout 2023, compared to the previous year.
The growth appears to be driven at least in part by consumers returning to work in offices, the report suggested, noting that all three concepts showed gains in their share of weekday visits. All three chains have also continued to add more locations to meet consumer demand for healthy, flavorful meals.
At the same time, consumers also continue to gravitate toward fried chicken concepts, including Dave’s Hot Chicken, Raising Cane’s, and Huey Magoo’s Chicken Tenders. These concepts, all of which saw strong growth in monthly visits in 2023, are opening new locations at a rapid clip.
As an indication of the strength of these concepts, the report found that their growth is being driven in part by double-digit gains in visits to existing locations. In November, monthly visits to Huey Magoo’s Chicken Tenders existing restaurants were up 17.7 percent year-over-year, while monthly visits to Dave’s Hot Chicken existing locations rose 16.7 percent, and monthly visits to Raising Cane’s Chicken Fingers existing locations were up 13.3 percent.
“While some diners will favor healthy foods in the new year, other consumers are likely to continue driving visits to fried chicken chains in 2024,” the report concluded.
The research also forecasted ongoing growth in the year ahead at chains that offer “affordable luxuries,” as exemplified by Parlor Doughnuts, Dutch Bros Coffee, and Pickleman’s Gourmet Cafe. As consumers continue to delay making some large purchases, they are instead rewarding themselves with small indulgences, according to Placer.ai.
“Consumers are willing to splurge on small treats that won’t break the bank, and tasty snacks and food items—from craft doughnuts to gourmet deli sandwiches to specialty coffee concoctions—could provide the perfect affordable and guilt-free pick-me-up,” the report concluded.
Other retail concepts that Placer.ai predicted would perform well in 2024 include personal grooming and self-care concepts, such as Tan Republic and LaserAway, as well as themed fitness concepts such as Touchstone Climbing and Club Pilates, and upscale apparel stores including Theory, Anthropologie, and Marine Layer.
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