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Retail Trends

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A baker’s dozen. That’s the number of retailers who have appeared on the Hot 100 chart every year since its inception in 2006.

The ranking of the Sustained Sizzlers is based on total growth between 2005 and 2010, with Amazon.com topping the chart at 301 percent — an annualized rate of 60 percent.

Whether Amazon’s high growth rate is sustainable could well depend on how it maneuvers against such rivals as Apple and Netflix, both of which also rank among the hottest of the hot. Amazon recently won a legal skirmish with Apple over use of the term “app store”; a federal judge in Oakland, Calif., declared there was a lack of “real evidence of actual confusion” among consumers.

Another example of how seriously Amazon takes its competition with Apple and other digital music download service providers came in May when it priced Lady Gaga’s latest album, “Born This Way,” at 99 cents on the first day of release and $6.99 thereafter; Apple’s best offer was $11.99. Amazon also took the opportunity to promote its Cloud Drive and Cloud Player services.

On another front, Netflix’s rapidly-expanding subscription service that streams movies and TV shows to electronic devices poses a challenge to Amazon’s efforts to find entertainment content that streaming subscribers will feel is worth their while. Amazon’s ace in the hole in this arena is the innovative e-book service powering sales of its Kindle device. Just three months ago, Amazon announced that e-book downloads had surpassed sales of physical books.

Given the apparel industry’s travails over the past decade, it’s something of a surprise that six of the sizzlers are clothing retailers: Aéropostale; Ascena (formerly Dress Barn); J.Crew Group; Jos. A Bank Clothiers; Ross Stores; and Urban Outfitters.

Runner-up for sustained sizzle is O’Reilly Automotive, which has fueled sales growth by acquiring smaller auto aftermarket retailers as it expanded beyond its Midwestern core territory, and then by benefiting from car owners’ collective decision to repair and maintain older vehicles rather than shell out for a new one during tight economic times.

O’Reilly’s momentum has carried into 2011, with sales rising 8 percent in the first quarter and profits up nearly as much in the first three months that all stores were operating on the same POS and distribution systems.

Amazon isn’t the only sustained sizzler operating in a unique retail niche; Tractor Supply Co. doesn’t have a lot of direct competitors, either. Billing itself as the country’s largest operator of farm and ranch stores, Tractor Supply is one of the few places where one can buy tractor seats, wood pellets, men’s and women’s apparel (as well as boots and other footwear), cattle feed and welding equipment. There are also home décor items, candy, snack food and toys.

The TSC juggernaut keeps rolling along, enjoying Q1 same-store sales increases of 10.7 percent. Such performance has gained the attention of Wall Street; the company’s shares hit 52-week highs this summer as the result of strong revenue and earnings growth and solid returns on equity.

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