For all the talk of retail attempting to surprise and delight consumers over the years, there’s at least one store that has David Marcotte with his nose and fingers figuratively pressed against the window in anticipation. Daiso, set to open just a few minutes from the Kantar senior vice president’s Arizona home, is “eclectic” and “remarkable,” he says. “And every time you turn a corner there’s something you never imagined thinking about buying.”
It’s the thrill of discovery in real time — and it’s a bit of a theme for this year’s list of NRF’s Hot 25 Retailers, with data compiled by Kantar. In addition to never-know-what-you’ll-find stores such as Daiso, Five Below, Aldi, Burlington and Ollie’s Bargain Outlet, the ranking of the nation’s fastest-growing retail companies includes unexpected investment from international companies, and even mall stalwarts making strides with new generations. It’s a list, as Marcotte says, full of interesting stories and fun.
Japan-based Daiso (No. 14) has been in the U.S. market since 2005. As of June, it had 131 units in seven states, with more states scheduled to open in 2024.
The company is akin to Five Below, Marcotte says, and is “incredibly popular with people between the ages of eight to 20,” including a significant back-to-school business. The product mix is “a complete surprise,” he says, including housewares, practical items, toys, cosplay, moisturizing masks and Japanese candies and confectionary.
As for the other adventuresome retailers on the list, Marcotte highlights Burlington (No. 16) as “kind of a stealth player with a dedicated clientele. People will go there every single week.” Otherwise, Five Below sits at No. 8, with 15.7% U.S. sales growth from 2022 to 2023, and Ollie’s Bargain Outlet is No. 10, with 15.1% growth.
Overstock.com tops the Hot 25 list, thanks largely to acquiring the rights to the online operations of Bed Bath & Beyond, effective 2023. Beyond that, however, there are only two other dot coms on the list: Chewy.com (No. 22) and Wine.com (No. 23). The other retailers on the list are omnichannel, including selling online. But that’s it for pure play.
Of the 25 retailers on the list, there are number of grocers: Aldi (No. 5), H.E. Butt Grocery (No. 13), Superior Grocers (No. 15), Cencosud (No. 18) and Grocery Outlet (No. 19). There’s also Schwarz Group (No. 2), which includes food retail under the Lidl and Kaufland brands.
Marcotte says H-E-B is no stranger to the Hot 25. “Their ability to grow inside Texas appears to be infinite. It’s a big state, the population is increasing and they have a really good sense of where to place stores.” H-E-B also has a broad portfolio of stores, including basic 20,000-square-foot supermarkets that operate in “all sizes of towns.”
Marcotte also highlights Superior Grocers, with its emphasis on the rapidly growing Hispanic segment, as well as Chile-based Cencosud, which acquired a majority stake in The Fresh Market, effective in 2022.
“It really surprised people when [Cencosud] did that,” Marcotte says. “But it’s been a remarkable success for them, and has had a significant impact on the bottom line.”
Last year, Cencosud wasn’t on the Hot 25 list. This year, it earned its place with 11.2% U.S. sales growth from 2022 to 2023, adding $211 million. As for Superior Grocers, it was No. 6 on the 2023 list with 30.1% growth. This year, that continued growth was 11.2%.
The overall list, Marcotte says, “really reflects the post-pandemic shift back into the full consumer experience.” This post-pandemic reality shows up with retailers such as Ulta Beauty (No. 24), Sephora (No. 9) and Tiffany & Co. (No. 20).
The cosmetics market took a big hit with people in isolation, but has decidedly been on the rebound. Tiffany’s, No. 16 on the previous year’s list with 14.2% U.S. sales growth, is also of note. Overall, Marcotte says, jewelry stores did very well during the pandemic, as “finding experiences and services to spend money on was tough.”
After the pandemic, malls regained foot traffic. At the same time, some mall standbys made adjustments to better appeal to the next generation. Abercrombie & Fitch (No. 7) and J.Crew (No. 12) have done “very well” in expanding their audience reach, Marcotte says.
NRF's Hot 25 Retailers ranks the nation’s fastest-growing retail companies.
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International companies are also making strong inroads. There’s Fast Retailing (No. 3, from Japan, with brands such as UNIQLO, Theory and Helmut Lang); Primark (No. 4, with headquarters in Dublin); Cencosud (No. 18, from Chile); Inditex (No. 21, from Spain, including brands such as Zara); Daiso Sangyo (No. 14, founded in Japan); and Aldi (No. 5, with headquarters in Germany).
From afar, Marcotte says, there’s a lot about the United States that’s appealing. Even Lululemon (No. 6) is Canadian.
