While much of retail commerce is moving online in many categories like apparel and hardware, retailers continued to add brick and mortar stores in 2019. Through March, 34 retailers had announced plans to open 2,458 new stores this year, according to Coresight Research.
There were 3,239 new store openings 2018. In the first quarter of this year, retail opening announcements were 75% of the total announcements in 2018. Dollar General leads the pack with 975 new stores planned for 2019. That will give the Goodlettsville, Tenn.-based discounter almost 16,000 U.S. locations.
“We remain very excited about our future real estate growth opportunities,” Dollar General CEO Todd Vasos said. “We believe our ongoing investment in high-return real estate projects, along with our strategic initiatives, will not only continue to drive long-term shareholder value, but will also allow us to further enhance our ability to serve our communities and our customers.
Dollar General is not the only one adding stores in 2019. Dollar Tree plans to add 348 stores and it will also add 202 Family Store locations. Other value players like Aldi also plans to ramp up store openings in 2019. This direct grocery competitor to Walmart plans to add 159 locations in the south and southeastern U.S.
Deep discounter Ross Stores plans to add 100 more U.S. locations this year. Ross competes directly with department stores and Walmart. Ross does not sell online and relies solely on brick and mortar. Burlington, a direct competitor to Ross, does have an active online business and plans to open 50 new U.S. stores this year.
Specialty stores are also expanded this year. Beauty retailers Ulta plants add 80 new store locations this year, while Sephora will open 35. Farm and ranch retailer Tractor Supply Company plans to add 80 stores this year. Craft stores Hobby Lobby and Micheals are also investing in more brick and mortar with 65 and 12 new locations, respectively.
In the grocery space, aside from Aldi’s 159 new stores, Sprouts Farmers Markets will add 30 stores, Wegmans and Lidl each plan to add 3 more U.S. stores this year. Costco announced 12 new clubs and Target plan to build 30 new stores this year. Walmart said it plans to add fewer than 25 new stores in 2019 and instead focus more heavily on 1,000 remodels and the continued rollout of online grocery to 1,000 new locations.
The department store landscape continues to be littered with too much real estate in general, but Kohl’s said it will add 4 new locations and Dillard’s will build two new stores. Nordstrom plans to add seven stores this year. These retailers are also closing a few non-performing locations.
Book store giant Barnes & Noble plans to add 5 stores this year, proof that consumers still like to shop for books in person from time to time, despite the endless selection on Amazon.com.
Retailers like Kohl’s, Ulta, Walmart, Sam’s Club and Home Depot each have robust omnichannel businesses that required brick and mortar for fulfillment. These retailers continue to invest heavily in technology that fuels the omnichannel capabilities.
Home Depot’s store count in the U.S. has basically been flat for the past 10 years but the investment in technology continues. The retailer just announced plans to hire 800 technology workers in 2,000 stores and 100 distraction centers.
“Technology is at the forefront of everything we do at The Home Depot,” said Tim Hourigan, executive vice president of human resources.
Over seven years Home Depot grew online sales to $5 billion, from just $500 million. As of 2018, online sales comprised 6.7% of Home Depot’s total sales. In late 2018, Home Depot said 47% of its online orders were picked up in stores, which is the definition of omnichannel retail.
Karen Martin, an analyst with BMO Capital Markets, said the retail industry continues to rightsize itself as real estate continues to be somewhat bloated. She said brick and mortar still makes sense in many cases. Purely online retailers are also starting to add some brick and mortar. Amazon plans to add two new stores this year and Wayfair plans to add a store.
A report by BigCommerce found the number one reason U.S. consumers choose to shop brick and mortar is that they want to see an item before they buy it. This is true, according to BigCommerce among 28% of Gen Z, 29% of Millennials, 40% of Generation X and 45% of Baby Boomers.
Martin said retailers who successfully bridge brick and mortar with online are likely the ones to win market share over time.
However, retail employment is expected to grow slower than the national average between 2016 and 2026, according to the U.S. Bureau of Labor Statistics.
“Employment of retail salespersons is projected to grow 2 percent from 2016 to 2026, slower than the average for all occupations. The employment of retail salespersons has traditionally tracked the health of the overall economy,” noted this BLS report. “The increase in online sales is expected to continue over the next decade, limiting the growth of the number of physical retail stores and moderating the demand for retail sales workers.”
There were 15.828 million retail employees in February, down from 15.833 million in February 2018, according to the BLS.