Five Below plans to expand its higher-priced Five Beyond concept by converting 400 more store locations, reports PYMNTS. The specialty discount store is looking to appeal to a new demographic of customers with its Five Beyond concept, which sells items priced above $5 but “still below the rest,” according to the company website. The new store prototype is currently rolled out to nearly 20 percent of its store fleet, or 250 stores. The move was announced alongside Five Below’s quarterly earnings, during which the company reported fiscal fourth-quarter profit of $171.3 million and a 13 percent year-over-year net sales increase.
Total Retail’s Take: Discount stores have been the beneficiary of an unsteady economy coming out of the COVID-19 pandemic. Five Below may be benefitting from an increase in higher income consumers, who may not normally shop at discount stores, watching their spending. These consumers would find the higher-priced Five Beyond items to be bargain deals, even though they’re not under the $5 price point the retailer traditionally promises. Five Below President and CEO Joel Anderson told investors on the company’s earnings call that customers who buy a Five Beyond item, priced at $6 or higher, “spend over twice as much as those who buy only Five Below items,” according to PYMNTS.
2023 will be a growth year for Five Below. “We begin the year with a healthy inventory position and a strong, debt-free balance sheet that enable us to continue to play offense, further elevate the customer experience and execute on our multiyear growth opportunity,” Anderson commented in a press release. Five Below plans to open 200 new stores in addition to the 400 converting into Five Beyond formats.
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