2024 looks to be another year of growth for retail, with more than a dozen retail chains already announcing plans for expansion this year. I always love to see headlines about retailers opening new stores. It shows that retail businesses are healthy enough to invest in expanding their physical store footprints. And as a long time veteran of the retail industry, it’s satisfying to see continued proof that brick-and-mortar retail isn’t going anywhere — bucking the ongoing trend of questioning whether brick-and-mortar retail is obsolete.
Discount stores are leading the charge of growth, with Dollar General opening 800 locations and Five Below opening 200-plus stores. Others, like Toys R Us, are opening flagship stores across the country, while Dick’s Sporting Goods is launching 10 experiential locations throughout the year. Meanwhile, online player Rothy’s has announced its own plan to expand its physical locations. Even Netflix is planning to open 10 retail stores, complete with restaurants.
Just going off the plans that have been formally announced by retailers so far this year, it amounts to roughly three new stores opening every day across the country — not to mention the thousands of locations that will be undergoing remodels this year. This continues last year’s trend of strong new store growth, which continues to outpace annual store closures.
Closing underperforming locations is a healthy part of managing a strong portfolio of retail stores. It’s the brands that don’t change that are the ones that go away completely. Last year, Christmas Tree Shops, Tuesday Morning, and Bed, Bath & Beyond filed for bankruptcy and shuttered all their stores, which may seem to give credence to those brick-and-mortar retail doubters. However, it’s not the simple fact that retail is struggling; it’s how those retailers were managed.
In the case of Bed, Bath & Beyond’s closing, there were several missteps in its efforts to turn things around. To me, it seems the company lost sight of what made it successful in the first place, and made a number of costly attempts to chase strategies that were working for others. When Bed Bath & Beyond finally attempted to go “back to basics” it was too late; it didn’t have a strong enough financial position to sustain any kind of turnaround.
What does it take for a retailer to keep growing and not find itself in the position of a one-time category-killer going bankrupt? It’s important to stay focused on what’s made you successful in the past, while keeping ahead of the evolving needs of your customers. It can be a tough balance between chasing a shiny object vs. knowing when and how to evolve, which takes a consistent leadership team that can critically assess what’s working and what needs to change.
Don’t ever count a retailer out. Toys R Us, which filed for bankruptcy in 2017 and closed all of its stores a year later, now has 1,400 locations and is opening new flagship locations, tapping into emerging markets. A turnaround is always possible, and growth can be just around the corner if you stay true to your brand, listen to your customers, and have the right leaders.
Demos Parneros is the founder of CityPark, a firm that funds and advises socially responsible companies in the retail and e-commerce space.
View Original Article
