Non-luxury item retailers are benefiting from consumers tightening their belts. These chains are offering new merchandise, as well as plans to add additional units this year. The southern region currently leads in retail leasing, but investors should expect the South and more remote areas to see continued development as retailers execute their expansion plans to increase their geographical reach.
For example, in the home improvement and garden supply sector, Lowe’s plans to grow its market share in rural areas by offering consumers a one-stop-shop experience with a broader assortment of farm and ranch products. The home improvement retailer will expand products in categories such as pet, livestock, trailers, fencing, utility vehicles and specialized hardware in up to 300 stores located in the South, Midwest and Northeast.
Tractor Supply also has a bullish outlook for 2024, with plans to open 80 new stores and an additional 10 to 15 new Petsense by Tractor Supply stores this year. Tractor Supply units in the 20,000- to 25,000-s.f. range, while Petsense stores average around 5,500 s.f.
Retailers in the sporting goods, hobbies, music and books sector also provide an affordable luxury option for consumers against the backdrop of high inflation. Despite softer sales growth than some of the other retailers, those in this sector are optimistic about expanding their brick-and-mortar locations.
Expect Barnes & Noble to be bullish on store growth following a strong year of store openings in 2023. The book retailer has set a goal to open 50 new locations in 2024 — the highest number of store openings in 15 years. High-traffic retail strip centers are ideal for Barnes & Noble and many former Bed Bath & Beyond spaces have been targeted with neighbors such as T.J. Maxx, Nordstrom Rack, Old Navy and Five Below. Large units will be in the 3,000- to 60,000-s.f. range, while the smaller concept stores will be between 7,000 and 25,000 s.f.
DICK’S Sporting Goods also has aggressive growth goals and plans to open between 75 and 100 House of Sport stores by 2027. These experience-focused stores include features such as a climbing wall and multi-sport cages to test out products and offer classes and events in partnership with community organizations. Ideal sites for House of Sport stores are 100,000+ s.f. attached to an open field that can be used as sports grounds or an ice rink during winter months.
