Retail

The Hottest Retailers Right Now Are … Supermarkets?

Supermarket chains dominated a list of hottest retailers in 2015, according to information released by the National Retail Federation’s (NRF) STORES magazine.

The trend is reflective of “grocers moving away from a one-size-fits-all approach and adopting new practices that focus more on their brands and shoppers,” according to NRF.

The NRF released its annual list of Hot 100 Retailers on Aug. 1, which is based on sales growth in 2015 over 2014 of both public and privately held retail companies by U.S. domestic sales with sales of at least $300 million based on figures compiled by Kantar Retail. Surprisingly, supermarket chains dominated the list, claiming nearly a quarter of the retailers who made up the list and two of the top five spots.

“The supermarket segment is a model of the dynamic changes in retail,” according to STORES Media Editor Susan Reda. “It represents a fast-changing marketplace where legacy banners are reinventing, smaller footprint operators are gaining share and online initiatives from Amazon Prime and subscription services, like Hello Fresh and Blue Apron, are sneaking a few bites of food from the plate.”

Haggen, a Bellingham, Washington-based grocery store chain, topped the list after seeing an astounding 325 percent increase in sales to $2 billon in 2015. STORES attributed Haggen’s robust expansion to the 146 stores the company acquired after Albertsons bought Safeway in 2014, although Haggen appears to have expanded too quickly, as the company filed for bankruptcy by the end of the year. Albertsons bought 29 of the “core” Haggen stores in 2016 and announced that 15 will continue to bear the Haggen name in Washington State.

“Nearly a quarter of companies on the list compiled by Kantar Retail are food retailers, including two in the top five and well-known names, such as Publix, Aldi and Whole Foods,” according to NRF. “The magazine said supermarkets are the retail industry’s hottest companies almost by default since consumers continue to buy groceries even as more discretionary spending is directed away from merchandise and toward services and entertainment.”

Second on the list of “hottest” retailers in 2015 was Dollar Tree, which has also seen some serious growth thanks to its 2014 acquisition of Family Dollar. Dollar Tree’s sales grew 138 percent to $19.9 billion in 2015, after placing 57th on the list in 2014.

“Not to be underestimated is the dollar store segment’s quest for a greater share of shoppers’ food budgets. These companies make a compelling bid for the value-oriented shopper with national brand name product offerings, convenience and an improved in-store experience,” Reda said.

Dollar General placed 69th on the list with an 8 percent increase in sales in 2015 to $20.36 billion.

GPM Investments came in third, a convenience store operator based out of Wilmington, North Carolina, that saw a 119 percent increase in sales to $535 million in 2015. Minyard Food Stores, a Carrolton, Texas-based supermarket chain, ranked fourth with a 108 percent sales increase to $324 million. TV shopping channel Evine Live grew 100 percent to $693 million in 2015 to rank fifth on the list.

Torrid, which split from Hot Topic in 2015, ranked sixth with a 100 percent sales increase at $410 million. And rounding out the top 10: 7) Wayfair, up 88 percent at $1.9 billion; 8) Bluestem Brands, up 61 percent at $1.7 billion; 9) Verizon Wireless, up 54 percent at $16.9 billion; and 10) H&M, up 48 percent at $3.9 billion.

Interestingly enough, three of the retailers in the top 10 — Wayfair, Evine Live and Bluestem Brands — do not have any traditional brick-and-mortar retail stores that sell to consumers.

“The themes we see highlighted this year — consolidation, specialization and digitization — are all important ones for all retailers, irrespective of size,” Kantar Retail Chief Knowledge Officer Bryan Gildenberg said in a statement. “Seven of the top 10 grew through significant acquisition, to gain scale and market scope in this dynamic, changing environment. At the same time, brands like Torrid, H&M and Wayfair have done a wonderful job of understanding their target consumer, helping their customers to be the best version of their specific, distinctive selves.”

One takeaway from all this? No matter the state of the economy or how dire economic times may seem, consumers still need to eat.

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PYMNTS STUDY: THE CROSS-BORDER MERCHANT FRICTION INDEX – JUNE 2020

The PYMNTS Cross-Border Merchant Friction Index analyzes the key friction points experienced by consumers browsing, shopping and paying for purchases on international eCommerce sites. PYMNTS examined the checkout processes of 266 B2B and B2C eCommerce sites across 12 industries and operating from locations across Europe and the United States to provide a comprehensive overview of their checkout offerings.

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