2021 Witnesses More Store Openings Than Closures, According to Coresight Research
In a promising sign for the U.S. retail sector, Coresight Research predicts that 3,344 stores will open this year, with a significant portion attributed to discount chains like Dollar General and Dollar Tree. This surge in retail openings is driven by several key factors that align with consumer demand and strategic growth strategies.
The ongoing economic uncertainties and inflationary pressures have led consumers to seek more affordable shopping options. Discount retailers like Dollar General and Dollar Tree cater to this need by offering low-priced goods, making them increasingly popular during tighter economic conditions.
These retailers have also leveraged their operational efficiency and streamlined store formats to rapidly expand into underserved or rural markets where traditional retailers have less presence. Their smaller footprint and cost-effective model make it easier for them to open numerous new locations.
The pandemic has also shifted consumer behaviour, with a renewed demand for convenient, local physical stores, particularly in communities served by discounters. This trend supports new store openings in neighbourhoods where consumers prefer quick, affordable in-person shopping.
Despite an overall softer retail real estate market and cautious leasing behaviour by many retailers due to economic uncertainty and tariff-related supply concerns, discount chains have demonstrated resilience. Their business models are less impacted by tariff shifts and higher inflation, encouraging continued growth in store counts.
While overall retail sales growth is projected to be modest and consumer confidence has wavered, Dollar General and Dollar Tree's focus on value, convenience, and penetration into less competitive markets positions them strongly for expansion in 2021.
In addition to Dollar General and Dollar Tree, specialty and apparel retailers such as Sketchers USA, Ulta Beauty, Sephora, Foot Locker, American Eagle's Aerie, and Dick's Sporting Goods are also planning to add new stores this year.
Dollar Tree's expansion includes a newer concept that combines its namesake banner with Family Dollar, aimed at underserved rural areas. The number of store openings in 2021 is significantly higher than the 2,649 closures announced so far, indicating a positive outlook for the retail sector.
As vaccines are rolled out, giving retailers hope for a return of foot traffic, it seems that the future of retail is promising, with discount retailers leading the charge in 2021.
The AI-driven research suggests that the retail sector might witness a surge in openings, with 3,344 stores predicted to open this year, primarily discount chains like Dollar General and Dollar Tree. This growth is fueled by consumers seeking affordable shopping options and these retailers' strategic expansion into underserved markets, even during economic uncertainties and inflation.
The ongoing pandemic has further influenced consumer behavior, driving demand for local, convenient stores, particularly in communities where discounters like Dollar General and Dollar Tree thrive. This trend underscores the potential for new store openings in neighborhoods that prioritize quick, affordable in-person shopping.
Despite a softer retail market and cautious leasing behavior by many retailers due to economic uncertainties and tariff-related supply issues, discount chains have displayed resilience and continue to grow, with their store counts projected to increase.
As vaccines are being distributed, offering retailers a glimmer of hope for revived foot traffic, the future of the retail sector seems promising, with discount retailers like Dollar General and Dollar Tree pioneering the way forward in 2021. Meanwhile, other specialty and apparel retailers are also planning to expand, such as Sketchers USA, Ulta Beauty, Sephora, Foot Locker, American Eagle's Aerie, and Dick's Sporting Goods, indicating a broader positive outlook for the industry.
