By Debra Hazel, President of Debra Hazel Communications
The depressing industry headlines never seem to stop: one after another, venerated retail names are closing stores or shutting down entirely. Less publicized are the stores that are continuing to expand. They may have slowed their growth in light of COVID-19 and the economic collapse that resulted, but all have announced sometimes substantial plans to open new stores in 2020 and beyond.
What do most of them have in common? A focus on convenience, necessity, and value. From dollar stores to grocers to big boxes dedicated to the thrill of the hunt, it’s clear that there’s never been a better time to be in necessity retail.
Not surprisingly in a time of economic troubles, dollar stores are surging. During the Great Recession, many discount shoppers turned to the even-lower-priced alternative and stayed. Dollar General has accelerated its expansion to 1,000 new stores in the fiscal year, with 500 already open in the first half. An additional 1,670 are scheduled to be remodeled, with 973 projects already completed).
“For over 80 years, Dollar General has served our customers through a unique combination of value and convenience,” said Todd Vasos, CEO at the company’s second-quarter conference call. “But it has never been more evident just how essential our role is, as our customers depend on us now more than ever for their everyday household needs.”
Competitor Dollar Tree has slowed down somewhat, but opened 131 new stores in the first half and remodeled or expanded 22 others. It still plans to complete 500 new stores opening this year.
With people eating at home more, it stands to reason that grocers, too, should expand, especially those dedicated to value and with a smaller footprint. Germany’s Aldi announced a $3.4 billion expansion strategy in the U.S. in 2017 and continues apace. It opened its 2,000th store in July and plans a total of 100 new locations in 2020. After a slow start, Aldi’s rival Lidl, too, is continuing to grow, recently announcing plans to open 50 units in the East Coast of the U.S. by the end of 2021. Both are emphasizing that because of their smaller size, they can open in convenient neighborhoods.
Expansion isn’t limited to food and deep discounts. Retailers that make shopping a treasure hunt experience also continue to grow. Burlington Stores now expects to open 62 new stores, while relocating or closing 26 stores, for a total of 36 net new stores in fiscal 2020. Two units originally planned for fiscal 2020 were shifted to fiscal 2021, bringing the total number of stores shifted out to the next fiscal year to 18 stores.
TJX Cos., the parent company of Marshalls, TJ Maxx, HomeGoods, and more, has ceased most of its remodels, but it’s still opening about 50 stores this year.
After pausing store openings because of the pandemic, Ulta Beauty announced that it will open a total of approximately 30 new units in fiscal 2020, and will continue to grow in 2021, including entering Canada.
“We are still finalizing our real estate plans for next year, but plan to open at least as many new stores in 2021 as we do in 2020,” said CFO Scott Setterstein at its most recent quarterly call with analysts. “While we have slowed our new store growth opening pace in the near-term in response to COVID-19 and evolving market conditions, we remain confident in the longer-term opportunity to continue to expand our fleet.”
Digital brands are continuing to expand, too, albeit not at these numbers. Hong Kong-based menswear brand O.N.S. has cautiously expanded to the U.S., debuting a store in New York City’s Nolita neighborhood in August after its Soho shop closed and the new location was delayed because of the pandemic.
And lastly, Amazon. The brick-and-mortar archnemesis has at long last opened its first non-Whole Foods Grocery, the Alexa- and DashCart-enabled Amazon Fresh, in Woodland Hills, California — at least to VIPs. The store is expected to open to the general public in several weeks. Yes, it’s a grocer, but it’s also a package pickup and returns station for all of its online wares. It’s an experiment — perhaps one that only Amazon can afford to conduct right now — but a sign that brick-and-mortar is still viable.
About Debra Hazel
President of Debra Hazel Communications
Debra Hazel is a veteran retail real estate writer, editor and media consultant based in New York City. You can reach her at firstname.lastname@example.org.