2024 Retailer outlook: Placer.ai shares what to expect from acquisitions, consumers

By Ryan Daily

- Last updated on GMT

Image Credit: Getty Images - Tom Werner
Image Credit: Getty Images - Tom Werner

Related tags Retailers Mergers and acquisitions Albertsons Kroger

Retailers are gearing up to fight for consumers' dollars through mergers and acquisitions, as shoppers head into stores less and look for opportunities to make the most out of their trips, RJ Hottovy, head of analytical Research at Placer.ai, shared during a recent webinar.

“Two themes that I really saw this year were people fixated on value, but not just low prices, getting value in something that you can't get anywhere else... We started to see a bit of that in the third quarter as well. So, while trends may have been down overall, I still think there's a lot of retailers, particularly those who pivoted and adjusted to the way consumers are behaving, [to have] a lot of reasons for optimism.”

2024 is set to be a big year for retail M&A

Retailers are looking for mergers and acquisitions (M&A) deals to better serve specific consumer bases, as a number of macro trends have changed how and where consumers shop, Hottovy said. “2024 is going to go down as a record year for M&A in the grocery space,” as deals like the merger of Albertsons and Kroger is set to close in the new year, he added. 

He continued, “I do think we're going to continue to see a lot of activity in this space and really there's a couple of reasons for it. One is that with rising interest rates, [retailers] are looking to maximize the return on their stores, and I think a lot of ways that we see that is by consolidating and creating economies of scale with those partnerships and those acquisitions.”

Retailers are also changing how they layout stores and opening new stores to attract consumers, he said. For instance, "Meijer in Michigan is going after some of the higher income segments by going into a smaller format store," he added. 

Consumer migration patterns are also factoring into retailer M&A deals, Hottovy noted. Consumers moved from urban centers to suburban and rural communities during the pandemic, but recently, those trends have started to reverse, he added.  

“As with such a movement of people and population growth, I think all of a sudden the addressable market in some of these areas have dramatically changed. So, I think this was a big motivation between Aldi's acquisition of Winn Dixie, the opportunity to go after the South and Southeast market where we did see such a minor migration push."

Consumers begin to change retail visit habits

While retailers are assessing their M&A strategies, consumers are on the hunt for retailers that provide the most value but not necessarily the cheapest price, Hottovy said. Consumers overall are reducing the number of times they head into stores, with retail visits down 2.8% in Q3 2023, per Placer.ai data.  

“I think it's going to be another year of continued focus on value and people looking to stretch their household budgets, particularly in the shorter periods, very event-driven, holiday focus, but I think we're also going to see the periods in between, people finding ways to get more creative with their household budgets.”

Retailers can entice consumers into their stores by providing unique experiences that they might not typically associate with the shopping experience. For example, the Hello Kitty food truck has become a popular pop-up experience with consumers lining up for hours to get items, which provides retailers an opportunity to tap into the hype and attention, Hottovy said. 

“These Hello Kitty products that you can get through the pop-up stores, they're unique, they're scarce, [and] people are afraid of missing out on them... They create a lot of buzz, and they drive a lot of visits to the location,” he said. “They've got a draw, and if people are there, they're going to continue to shop in a lot of cases too. So, I think that this is important."

Related news

Follow us


View more