The Supply Side: Discount Stores Lead Retail Growth 2021

As Walmart and other retailers focus and spend heavily on omnichannel shopping, other discounters such as Dollar General, Dollar Tree and Ross have announced expansion plans for more stores in 2021.

Coresight Research reports more than 3,199 new store announcements in the first quarter of 2021, compared with 2,548 closures. It is the first time in years the sector showed net growth in stores, according to Deborah Weinswig, CEO of Coresight Research.

Coresight tracked 8,953 closures, along with 3,298 openings in 2020, amid the COVID-19 pandemic. Coresight reported 4,548 store openings announced in 2019. So far, in the first quarter of 2021, Coresight said store openings are on track to outpace prior years.

The discount and off-price segment is poised to keep growing and is carrying the bulk of new store expansion projects. Ike Boruchow, Wells Fargo analyst, said recent surveys by his firm indicate growth in beauty specialty and the off-price discount segment of retail.

Scott Benedict, director of retail studies at Texas A&M University, said off-price discounters and dollar stores are an anomaly as they grow despite having a limited online presence. He said dollar stores are serving many on a limited budget, and during the pandemic, they also became the go-to for fill-in trips when consumers needed cleaning supplies or diapers.

“It’s quite interesting when you think about how dollar stores and discounters are defying the conventional retail trends that have retailers like Walmart doubling down on e-commerce and omnichannel shopping conveniences that also appeal to consumers,” Benedict said. “That just shows what works for one retailer won’t be the answer for others.”

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