Offline is Cool, Again.

In the first nine months of 2022, major US-headquartered retailers announced plans to open about 5,870 stores, up from about 5,725 for the same period last year, says a report from National Retail Federation (NRF). What’s more, stores could see stronger sales growth than e-commerce this holiday season for the first time in years as consumers return for in-person experiences.?

Discount/dollar, Digital-natives, Auto parts lead store surge

Opening announcements have been concentrated in the discount/dollar and off-price sectors, which have historically done well in good and bad economic times and have been less affected by online competition than other areas of retail.

Five Below, which has expanded its price points above $5 with its Five Beyond initiative, said earlier this year it plans to triple the store count to more than 3,500 by the end of fiscal 2030. Family Dollar is planning to open 400 new stores this year on a base of 8,000-plus stores, while Dollar Tree is planning to open 190 stores on a base of 8,000-plus stores.

Off-price retail leader TJX plans to open 150 new stores this year on a base of nearly 4,700 total stores. Burlington plans to open 90 net new stores on a base of about 840 stores.

Auto parts retailers have also shown less economic sensitivity than other retailers and continue to focus more on the in-store experience and growing their store footprints than online growth. O’Reilly Automotive planned to open 175-185 net new stores this year, which implies just over 3% growth on a base of more than 5,700 stores, and Advance Auto Parts announced plans earlier this year to open 125-150 new stores on a base of about 5,000 total stores.

Many retailers opening stores are digital natives, including Warby Parker, which went public last year and has reaffirmed plans to open 40 new stores this year on a base of about 160, which implies 25% growth.

Dallas-based beauty product “dollar store” MISS A has the most aggressive store growth ambitions among digital natives; it plans to grow to 200 stores over the next five years.

Other include Gap’s Athleta brand, which plans to open 30-40 new stores on a base of 227, Fabletics, which expects to open 30 new stores on a base of more than 70 stores, and bed and bath brand Brooklinen, which said in April it plans to have 25 to 30 stores by 2024, including a tripling of the store count from two in 2022.

Despite projections of doom for brick-and-mortar retail, the power of in-store experiences clearly remains undimmed. In India and elsewhere, evidence on the longevity and relevance of offline retail is only getting stronger, despite the march of online shopping. But there is also no question that physical retail needs to be tweaked for the new, digital-first world. Join us at India Food Forum?on Dec 7-8 at The Westin Mumbai, Powai Lake, to experience how brick-and-mortar grocery stores and food service units of the future are shaping up!