Study: Two retail channels poised for fastest store growth
Consumers’ increasing focus on price and speed bodes well for two types of brick-and-mortar chains.
According to new data from retail analytics platform Edge by Ascential, discount and convenience stores in the U.S. are projected to grow faster than all other offline retail channels over the next five years.
Non-food discount, food discount and convenience stores are all projected for annual growth rates above 5%, whereas all other offline retailers, aside from membership club stores, are projected at annual growth rates of 3% or below. Convenience stores are projected for the highest growth at 5.4%, with discount and non-food discount stores projected at 5.3% and 5%, respectively.
Discount grocery stores, in particular, are projected to continue gaining overall share, increasing to 9.7% of food sales in 2024, from 8.8% in 2019 and 7.4% in 2014. Convenience stores are also proving relatively resistant to share loss from online retailers, with only a 0.2% loss in share from 2013-2018.
Analysis from Edge by Ascential indicates the forecast seems to reflect broader economic trends, with wages remaining stagnant for many workers, placing increased sensitivity on overall value, even if it means more limited assortment. The outlook is represented in the chains that were planning to add U.S. stores in 2019. German-owned discount grocery Aldi was expected to open 100 new locations. More than 900 Dollar General stores were expected to open, with hundreds of locations adding produce and fresh foods, and there was expected to be a net increase of 160 Dollar Tree and Family Dollar stores.
"What we're seeing offline is similar to what we're seeing online," said David Gordon, research director at Edge by Ascential. "There's an increasing emphasis on low cost and convenience. You can see it through the lens of Amazon, and it will continue to play out online in similar ways."
The findings are drawn from Edge by Ascential's Retail Market Monitor, which analyses how individual sectors are currently performing and how they are forecast to grow by 2024.