Though the pandemic has continued to present major challenges, it has been a banner year for store opening announcements by U.S.-headquartered retailers, according to The Daily on Retail, a financially focused industry research platform, which counts roughly 5,725 store opening announcements year-to-date through calendar 3Q21.
This is nearly double the 2,890-plus store closing announcements over the same period and highlights retailers’ optimism and their recognition of the importance and longer-term benefits of physical stores.
The lower number of store closing announcements reflects several factors, including large numbers of actual closings in each of the past several years, especially when the pandemic hit in 2020, when The Daily on Retail tallied more than 10,700 store closing announcements by U.S.-headquartered retailers.
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A stimulus-driven rebound in consumer spending, along with pandemic-driven lease renegotiations and balance sheet restructurings have also helped keep the store closing numbers down.
Dollar, discount, off-price and warehouse clubs are opening leaders
As has been the case for many years, store opening announcements in 2021 have been heavily skewed toward the dollar store, discount, off-price and warehouse club sectors. Combined, these sectors account for 45 percent of all year-to-date opening announcements, or just over 2,590 stores.
Dollar General has announced plans to open 1,050 new stores, more than any other retailer, and will have more than 18,200 total stores by the end of January 2022. Dollar Tree, which had 15,685 stores at the beginning of the fiscal year, plans to open 600 new stores under its two banners, Dollar Tree and Family Dollar.
Five Below, which carries an assortment of fun and eclectic merchandise mostly priced at $5 or less, recently said it was on track to open 170-175 new stores and end fiscal 2021 (January 2022) with nearly 1,200 stores on its way to a longer-term target of more than 2,500 stores across the country.
Off-price leader TJX has announced plans to open 120-plus net new stores on a global base of 4,572; Burlington said it will open 100 new stores on a base of 761; and Ross Stores plans to open 65 new stores, including 45 new Ross stores and 20 dd’s Discounts on a base of around 1,860.
Citi Trends, another off-price retailer, is planning to open 100-plus stores over the next three years on a base of 585 at the beginning of FY21.
Costco has opened or announced 60+ net new clubs so far this year on a base of around 800 and is planning second warehouses in China and France and the first club in New Zealand in its FY22 (August 2022). Sam’s Club has announced 30 new clubs globally on a base of 800-plus, and BJ’s Wholesale Club has opened or announced 16 new clubs so far this year on a base of 221.
Auto parts retailers are also growing aggressively
AutoZone recently announced plans to open about 200 new stores throughout the Americas on a base of more than 6,700, O’Reilly is planning a net 165-175 stores on top of 5,616, and Advance Auto expects to open 80-120 new stores on a base of 4,800-plus. The combined total for the sector using the mid-points of ranges is 470, or 8 percent of total announced openings so far this year.
More digitally native retailers are opening physical stores
It’s important to note many retailers opening stores are digital natives, including Warby Parker, which recently went public and said in pre-IPO investor materials it expects to sustain strong revenue growth into fiscal 2022 in good part by “expanding (its) retail footprint.” For fiscal year 2021, Warby Parker plans to open 30-35 new stores and end the year with 155-160 stores.
Other digital natives opening stores include Fabletics, which has announced 24 new stores on a base of 50; home-furnishings brand Parachute, which is planning 20 new stores on a base of 10; and sleep-focused Purple Innovation, which has announced 20 new stores on a base of nine.
Specialty apparel and footwear are closing leaders
Nine retailers have announced 100 or more store closings so far this year, including Christopher & Banks, which filed Chapter 11 in January and subsequently said it would close all 449 stores in 44 states; Foot Locker, which plans to close 345 of its 2,950-plus stores; and Francesca’s, which filed Chapter 11 in December 2020 and said in January 2021 it would close half of its 550 stores.
Others closing stores include American Eagle Outfitters, which said in January it would close 200-225 of its 880 stores in North America over the next 2-3 years, and Chico’s, which said in the spring it would close 13-16 percent of its roughly 1,300 store fleet in the next three fiscal years.
It’s important to note openings and closings are specific numbers that have been announced, not completed, and could extend over several years. Also, The Daily on Retail’s tally excludes openings and closings that may be occurring in 2021 but were announced in 2020 or prior.
Patrick McKeever covered retail for more than 20 years as a Wall Street analyst before launching The Daily on Retail in 2019.