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Retail & Dining Q1 2025 Recap: Budget-Friendly Segments Shine 

Find out how retail and dining segments performed in Q1 2025.

By 
Shira Petrack
April 14, 2025
Retail & Dining Q1 2025 Recap: Budget-Friendly Segments Shine 
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Key Takeaways
  • Minor retail & dining visit declines: The retail and dining space experienced slight visit declines in Q1 2025 – potentially indicating softening consumer sentiment – though budget-friendly options showed resilience.   
  • Lower-priced dining offerings shine: Budget-friendly dining options like coffee and (to a lesser extent) QSR outformed full-service restaurants, likely reflecting diners’ price sensitivity.   
  • Grocery outperformed other essential retail categories: Grocery visits increased YoY while visits to discount & dollar stores stabilized, suggesting that the competitive pressure from dollar stores on the grocery category may be subsiding. 
  • Visits fell at superstores, gas stations & c-stores, and drugstores & pharmacies, perhaps due to reduced discretionary spending within these categories. 
  • Off-price remains on top: Off-price retailers continue to outperform other apparel segments, highlighting consumer preference for value and discounts amid budgetary concerns.   
  • More auto repairs, fewer new cars: Consumers are prioritizing auto repairs over new car purchases, indicating a focus on cost-saving measures in the auto sector.

Minor Retail & Dining Visit Declines

Visits to brick-and-mortar retail and dining chains fell slightly in Q1 2025 compared to Q1 2024. The year-over-year (YoY) visit gaps widened to 0.5% for retail while dining visits dropped 1.4% below Q1 2024 levels. And while some of the dip may be due to Q1 2025 having one day less than 2024’s longer February, the decline could also signal a softening of consumer sentiment. 

At the same time, the decrease in visits was extremely minor. In the retail space especially, YoY visits were technically negative, but at -0.5% this year’s Q1 visitation trends remained essentially on par with last year’s traffic numbers. The muted dip in visits during this period of economic uncertainty is likely due to the resilience of the U.S. consumer and to the range of budget-friendly retail and dining segments that provide options to even the most price conscious consumers.

Lower-Priced Dining Offerings Stand Out

Although overall dining visits declined in Q1, some budget-friendly options did experience visit growth. Visits to coffee chains were up 1.7% in Q1 2025, and fast casual and QSR concepts – that operate at a somewhat higher price point – saw a minor traffic drop of 1.4% YoY. Meanwhile, traffic to full-service restaurants declined 3.0% YoY.

These visitation patterns suggest that consumers are still willing to spend on budget-friendly treats, such as a specialty coffee or pastry, and – to a lesser extent – slightly pricier fast-food or fast-casual entrees. But many may be cutting back on meals at sit-down restaurants and redirecting their spending towards more affordable indulgences.

Grocery Leads Essential Retail 

Although overall retail visits remained relatively close to Q1 2024 levels, traffic declined to several essential retail categories – including superstores, gas stations & convenience stores, and drugstores & pharmacies. Retailers in these categories also carry many non-essential items, so the dip in visitation may be due to reduced discretionary spending within those categories. 

Meanwhile, visits to the grocery category increased 0.9% relative to last year following three straight quarters of YoY visit growth, and traffic to discount & dollar stores stabilized following several years of rapid growth. This suggests that the competitive pressure from discount & dollar stores on traditional grocery formats may be abating and highlights grocery's ability to withstand challenges in the evolving retail landscape.

Off-Price Remains On Top 

Consumers’ budgetary concerns are also evident in the recent performance of the various apparel segments. Off-price continued leading the apparel pack with Q1 2025 visits up 3.2% YoY, while every other apparel segment analyzed experienced a dip in traffic. Sportswear & athleisure in particular – which saw visits surge over the pandemic – saw visits decline for the fourth quarter in a row.

More Auto Repairs, Fewer New Cars

The auto retail space also revealed consumers' relatively thrifty preferences over this past quarter. While visits to auto parts shops & service chains increased 2.5% YoY in Q1 2025, visits to car dealerships fell 4.1% – suggesting that consumers are bringing in their cars for repairs rather than trading them in for newer vehicles.

Catering to Value 

Q1 2025’s retail and dining visitation patterns suggest that today’s consumer continues to be highly price conscious, with the budget-friendly segment coming out ahead in almost every category analyzed. Retailers and dining concepts who can cater to consumer’s value orientation will likely come out ahead in this increasingly competitive market. 

For more data-driven retail and dining insights, visit placer.ai/anchor

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