Reports of the death of physical stores seem to be greatly exaggerated. Don’t believe it? Ask TJX, the dollar stores, Five Below and lots of other retailers.
In the midst of perhaps the biggest prolonged shutdown of physical stores in retailing history a number of companies have announced aggressive expansion plans in their footprints over the next few years. This does not come at the expense of the ongoing market share gains being made by e-commerce but instead are viewed as a reaffirmation of the role of in-person shopping particularly as so many other stores are shuttered.
Even with the hundreds of new stores coming to the retail landscape the total still pales in comparison with the tens of thousands that have gone away since the pandemic first took hold of the economy 15 months ago. Yet, they do show that the retailing industry is still very much committed to the physical store. Though digital sales are surging towards the 25% mark in overall revenue, it still means three-quarters of buying activity continues to take place in physical stores. Add in the omnichannel role stores play in processes like curbside pick-up, BOPIS, same-day deliveries and online order fulfillment and they become even more valuable.
In the meantime, the store opening announcements are piling up:
TJX: The parent company to the country’s biggest off-price brands is moving on all fronts to expand its store base. Long-term it has said it will nearly double the number of HomeGoods units from its current 800-store count to 1,500 over the next couple of years. Short-term, the company plans to open 81 stores across its multiple banners in 2021.
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Five Below: The dollar-type format geared to younger shoppers says it plans to open between 170 and 180 locations this year, up from 110 last year. This will bring its total count up to about the 1,200 range.
Bath & Body Works: Even as its parent company is closing another 30 to 50 more of its flagship Victoria’s Secret locations, after shutting nearly 250 last year, the personal lotions and potions brand will get 50 new stores in North America. This continues the transformation of L Brands
Ikea: Sometimes off the retail radar of many observers, the big box furnishings chain has said it will continue to expand its in-town small-store (5,000-square-feet) and mid-sized inner suburban (100,000-square-feet) formats beyond the current New York City test to four more cities over the next three years: Chicago, Los Angeles, San Francisco and Washington, DC. This is in addition to several of its signature full-size (500,000-square-feet) new locations.
Burlington: Coming off a strong resurgence over the past few years, the off-pricer said it would open about 100 new locations this year. Right now it has about 750 locations but in announcing its 2021 plans it said it eventually expects to get to 2,000 stores
Dick’s Sporting Goods
Plus: A number of other national chains also have announced various expansion plans, including BuyBuyBaby, Bob’s Discount Furniture, Casper and Sprouts. Add in Sephora’s dramatic expansion into Kohl’s
Need more proof? There’s another big national retailer with plans for a variety of new stores across several formats in both general merchandise and grocery this year. Its name is Amazon