As Target, Best Buy and Walmart sales loom, foot traffic data indicates pent-up demand

By James Rogers

There could be a pent-up demand for retail therapy, according to analytics company Placer.ai

Foot-traffic data points to pent-up demand ahead of October sales at Target Corp., Best Buy Co. Inc. and Walmart Inc., according to analytics company Placer.ai.

Target's (TGT) Circle Week runs from Oct. 1 to 7, ahead of rival Amazon.com Inc.'s (AMZN) Prime Day sale on Oct. 10 and 11. Best Buy (BBY) is also offering special purchase rewards, sales events and "perks" for members starting in October. And Walmart (WMT) is holding a sales event from Oct. 9 to 12.

In a blog post Thursday, Placer.ai's Marketing Content Manager Shira Petrack wrote that the current retail landscape seems to present little reason for optimism of a short-term turnaround. "With prices continuing to rise, many consumers are thinking twice before hitting the shops," she said. "Weekly visits to major retail chains nationwide has consistently remained below 2022 levels, and several leading analysts have forecast a lackluster holiday season."

Related: Retailers compete to be first to hold holiday sales in a bid to spur flagging demand

However, Petrack said there are indicators of pent-up demand as we enter October sales, with consumers prepared to spend money on presents, which could bode well for the upcoming holiday season. Petrack noted that foot traffic to major retailers nationwide increased 3.3% year-over-year during the week of Mother's Day between May 8 and May 14. "Nationwide retail visits also got a boost in June and July, when the economic outlook brightened temporarily -- indicating that there could be a pent-up demand for retail therapy, and that consumers are waiting for the slightest excuse to return to stores," she wrote.

Like the wider electronics sector, Best Buy was lagging behind the superstore category, according to Placer.ai's data, but has also demonstrated its ability to drive visits during key retail holidays. In the week following Father's Day, for example, visits were up compared to the same period in 2022.

"Target and Walmart have also seen their YoY visit gap widen recently, as retail visits slowed more than usual during the off-season between Back to School and holiday shopping," said Petrack. "But both brands also saw a YoY boost in visits during the brief window of renewed consumer confidence in June and July, which suggests that shoppers have not abandoned these brands."

Related: Target to close 9 stores across 4 states, citing theft

"Instead, increasingly picky shoppers may be waiting for the best deals -- and the upcoming October sales events may be just the thing to unleash consumers' pent-up demand and drive shoppers back to brick-and-mortar venues," she added.

Target's stock was up 0.2% Thursday morning, while Best Buy was down 0.2% and Walmart was up 0.4%, compared with the S&P 500 index's SPX gain of 0.3%.

Ciara Linnane contributed.

-James Rogers

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09-28-23 1018ET

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