Opening new locations is back in trend for several US retail chains.
Executives at numerous big retailers have recently praised the chains’ efforts to win market share by opening additional stores. Target (TGT.N) has announced its plan to add 300 stores to its network. Meanwhile, Walmart (WMT.N) and Sam’s Club will open 150 and 30 new locations respectively. Bloomingdale’s and Bluemercury are also expanding their presence with 15 and at least 30 new stores.
After years of store closures and warnings of a “retail apocalypse”, online buying surged tremendously, especially during the epidemic. However, this new development shows a significant shift in approach.
Shoppers have continued to visit businesses, even if only to pick up online items or grab a Starbucks coffee. This has occurred despite certain well-known retailers having filed for bankruptcy. These include J.C. Penney, Lord & Taylor, and Bed Bath & Beyond. However, this has occurred despite their popularity.
Consumers prefer store pickup and delivery services, according to Walmart and Target. These services have boosted their visits and sales in their most recent statistics. Walmart stated that its online order pickup and delivery services helped increase traffic by 4%. Target attributed the recovery of about 240 basis points of traffic in the holiday quarter to the popularity of “Drive-up”. This service was more in demand than in the previous quarter.
Target announced on Tuesday that it would open more than 300 full-size stores over the next decade, for example. The Minneapolis-based firm intends to expand food portions in new stores after increasing revenues by $8 billion since 2019. Once completed, the additional Target stores are estimated to increase sales by $15 billion per year.
It also plans to revamp around 2,000 current locations. The remodels will vary in scope and scale. Some stores will undergo full-scale makeovers, while others will receive less dramatic enhancements. For example, some stores will install new light fixtures, Ulta Beauty (ULTA.O) areas, and expanded backrooms. These backrooms will help complete online orders through Target’s same-day delivery service.
Walmart has likewise shifted its strategy. The retailer made an announcement in 2015. It decided to halt its shop expansions and concentrate on its e-commerce business. Consequently, it could compete better with Amazon.com (AMZN.O). It last launched a store in November of 2021.
In January, however, it announced plans to construct over 150 additional Supercenters and smaller-format Neighborhood stores over the next five years. The company revealed its intention to open 30 new Sam’s Clubs around the country last year. This was a significant move, as the chain had not launched any new locations since 2017. It will also revamp 650 existing Walmart stores over the next 12 months.
Walmart is a retail giant with annual sales of more than $600 billion. It operates over 4,700 stores in the United States, most of which are Supercenters that sell a wide range of products from apples to shoes and televisions.
Macy’s (M.N) is another retailer that is expanding with new stores. The department store operator has plans to expand its upscale business. It will open several more Bloomingdale’s and Bluemercury stores in the next three years. Macy’s has announced the expansion of its premium brands. However, some flagships and 150 large locations will close. The company wants to focus resources on higher-performing segments.
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