5 Retailers That Are Opening More Than 100 Stores in 2019

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By Tricia McKinnon

While some retailers are downsizing there are a number of retailers that are expanding their store footprint.  The retailers that are opening the greatest number of stores in 2019 all happen to be discount retailers.  Dollar stores, in particular represent the only category within retail in the US where the total number of stores grew in 2018.  These retailers have found that a mix of low prices as well as a treasure hunt atmosphere in many cases have been crucial to getting customers coming back for more.  While a treasure hunt may on the surface seem to be just another fun shopping experience it creates something much more foundational, a habit.  Retailers like TJX have trained customers to go back to their stores on a frequent basis so that they do not miss out on the latest merchandise. 

The success of these retailers show that even with historic low unemployment levels low wages have lagged the economic recovery and consumers have maintained the thrifty spending habits they obtained during the great recession. Here are the retailers with the largest number of planned store openings in 2019.

1. Dollar General – 975 stores

With over 15,000 stores Dollar General has more stores under a single banner than any retailer in the US.  Despite the name Dollar General it sells merchandise that costs up to $20 and overall its prices are 20% to 40% lower than prices found at grocery and drug stores.  Dollar General has had an impressive 29-year sales growth streak.  Even Walmart has had two years of comparable sales declines in the past decade.   With 900 store openings in 2018 Dollar General opened more stores than any other retailer in the US last year. Given that the dollar store category only represents 4% of retail sales, there is more room to grow. Dollar General plans to open 975 stores in 2019.  

2. Dollar Tree - 350  stores

Dollar Tree is the second largest dollar store in the US behind Dollar General.  Dollar Tree has over 7,000 stores and opened 276 stores in 2018.  Dollar Tree is planning to open 350 new locations in 2019 under the Dollar Tree banner. The discount store chain is also planning to close 390 of its Family Dollar locations in 2019. The retailer will also convert 200 Family Dollar stores into Dollar Tree stores. Dollar Tree purchased Family Dollar in 2015 for $8.5 billion in order to compete better with Dollar General but the acquisition has so far failed to achieve expected gains.

3. Five Below – 145 – 150 stores

Five Below is another deep discount chain and at the end of 2018 it had 750 stores.  It opened 125 new locations in 2018 and it plans to open 145 to 150 stores in 2019. Its treasure hunt store model has been effective at driving traffic and sales. Stores are stocked with latest on trend items for tweens and teens.  Its merchandise ranges from apparel to books to candy to phone cases to school supplies. Everything in its stores is $5 or less.  Five Below competes with Dollar General and Dollar Tree.  CEO Joel Anderson has said: “we give a sense of discovery throughout the whole store.  It’s like T.J. Maxx for kids.”  Similar to other discount stores customers have to visit the store frequently to see what’s new and exciting.   Over the past five years Five Below has tripled its store count. 

4. TJX – 140 stores

Its treasure hunt plus low prices is a winning strategy. TJX has over 4,000 stores.  It opened 87 stores in 2018 and plans to open 140 stores in the US in 2019.   Speaking about the company’s performance, Ernie Herman, President and CEO of TJX has said: “we have great confidence in the enduring appeal of our treasure-hunt shopping experience, with the vast majority of overall retail sales occurring in brick-and-mortar locations.”  The company has performed well not only in boom times but also in recessions.  The company has only one year with a  comparable store sales decline in the company’s 40 year history. The company sources product from more than 20,000 vendors including brand names such as Nike, Steve Madden and Ralph Lauren. While many retailers have struggled to maintain traffic, in 2018 TJX achieved an impressive 16 consecutive quarter increase in customer traffic. 

5. Aldi - 130 stores

Aldi is a German grocery store that is growing quickly in the US.  It is a no frills retailer that has fewer services but passes the savings back to customers in the form of very low prices.  For example, customers have to bag their own groceries and pay for bags.  In certain markets like Huston and Chicago, Aldi’s prices are 15% cheaper than Walmart’s.  Aldi has more than 1,800 stores in the US.  It opened 200 stores in 2018 and is planning to open 130 stores in the US in 2019.  Speaking about Aldi, Greg Foran, CEO of Walmart’s US Operations has said: “I never underestimate them. I've been competing against Aldi for 20-plus years. They are fierce and they are good.” The company stocks fewer (around 1,400) items per store than the average supermarket (40,000 items). The retailer also generates 90% of its sales from its own private label brands. Its store size is also much smaller than competitors with its store size averaging 12,000 sq. foot vs. 178,000 sq. ft. at a Walmart super centre.  

 

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Tricia McKinnonTrends