The retail landscape is fundamentally shifting from one focused on the quest for total market dominance among individual retailers to a new focus on owning specific shopping missions.
“Retailers that forego attempting to compete on every front and instead clearly communicate their mission-specific value propositions – whether that’s emergency runs, bulk essentials or family shopping experiences – may come out on top,” according to a Placer.ai analysis.
This shifting landscape has been driven by evolving shopper priorities, economic pressures and new competitors in the market, particularly the emergence and growth of value-focused players that have put pressure on legacy retail powerhouses to find ways to maintain their visit share, said Placer.ai. This new reality has created a complex ecosystem where loyalty, geography and cross-visitation patterns each play a role in defining success beyond market share.
Just six years ago, Walmart and Target were the two brick-and-mortar behemoths that dominated the retail space, but since then, Dollar General, Dollar Tree and Costco have experienced hypergrowth, with overall visits increasing by between 36.6% and 45.9% since 2019. Much of gains was driven by aggressive store expansions. That came as average visits per location stayed constant for Dollar Tree and grew for Dollar General and Costco, signaling that the chains are successfully filling new stores with visitors, some of whom may have been lured away from Walmart or Target. Some of this can be attributed to the extreme value orientation of U.S. consumers in recent years, the report said.
In 2019, 55.9% of combined visits to these five retailers went to Walmart, but since then, the retailer's relative share has fallen below 50%. Target’s share of visits used to rank second with 15.9% of combined traffic, but as of the first half of this year, Dollar General received more visits than Target after garnering 12.1% of combined visits in 2019, said the analysis.
The report analyzes each retailer's core mission. Walmart caters to essential, non-discretionary shopping and has a stronghold in rural and semi-rural areas. Dollar General also serves a large share of rural and semi-rural shoppers and is focused on providing everyday basics to underserved communities, which puts it in direct competition with Walmart. Target and Costco both compete for suburban and small city shoppers with a focus on families seeking one-stop shopping and discretionary offerings. Costco’s audience skews slightly more affluent. Dollar Tree showcases a balanced real estate strategy with strength in suburban and small cities, but a solid footing in both rural and urban areas as well. Its smaller store format and fixed $1.25 price point on most items provides predictability and convenience for quick shopping trips and small quantities of discretionary items.
Shoppers are increasingly spreading their visits across multiple retailers, with Walmart remaining the most popular cross-shopping destination for visitors of every chain, followed by Target.
“This creates an interesting paradox when viewed alongside the overall visit share shift,” said Placer.ai. “Even as Walmart and Target's total share of visits has declined, their importance as a secondary stop has actually grown. This suggests that the legacy retail giants' dip in market share isn't due to shoppers abandoning them. Instead, consumers are expanding their shopping routines by visiting other growing chains in addition to their regular trips to Walmart and Target, effectively diluting the giants' share of a larger, more fragmented retail landscape.”
Walmart enjoys strong loyalty, with nearly half of its visitors returning at least three times per month, according to Placer.ai. This steady high-frequency visitation underscores how necessity-driven shopping anchors customer routines. However, the other chains are making loyalty gains as well, with a new emphasis on fresh produce bolstering Dollar General and drive-up service and same-day delivery boosting Target.
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