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These Value Retailers are Still Steadily Opening Stores

While many retailers have been on the move to close stores, it isn’t all doom and gloom at retail—a number of them are also scouting locations to add to their door count.

Of course, those that aren’t doing so well are focused more on store closures. The discounter Fred’s has closed close to 300 stores this year in an effort to pare down and firm up its balance sheet. Other store closures have been due bankruptcies or liquidations. Ascena Retail Group’s Dressbarn is winding down operations and is set to close all 650 stores by the end of this year. Charming Charlie, which just entered its second tour of bankruptcy proceedings, is also in wind-down mode, and will close 100 of its stores.

Coresight Research is projecting that store closings, including apparel, home and supermarkets, could see 12,000 locations get shuttered by year-end.

A UBS report from May predicted that the ongoing trade war and tariff issues between the U.S. and China could accelerate the closures, also leading to 12,000 shuttered locations. And if other tariffs come into play, those numbers could climb higher. The Trump Administration is already planning a tax on European Union imports that is expected to happen before the end of this summer. And there has been talk of the administration taking a closer look at trade policies in other key sourcing locales, like Vietnam, India and Turkey.

On the flip side, what hasn’t garnered as much attention is the number of retailers who plan to open stores. While these new doors are from a wide range of retailers, many are just for a handful of stores.

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The one category where there is clear evidence of store growth is the value distribution channel: discounters, off-pricers and dollar stores.

Below is a list of some of the value-based retail chains set to open stores this year.

Costco Wholesale Corp.

Slated new stores: 20

Backstory: Walk into a Costco warehouse center and groceries, electronics and health and beauty options, and it might be easy to think most shoppers would be channeling their energy here. But the hidden secret is that apparel and footwear options have been growing categories for the warehouse membership club. Annual volume is believed to be in the billions as brands use the channel to sell excess inventory or test new lines.

Dollar General

Slated new stores: 975

Backstory: Dollar General has plans to be even bigger, with another 975 doors set to open in 2019. That’s more than the 900 doors it opened in 2018, but far fewer than the 1,315 stores opened in 2017. The new doors will add to its existing base of 15,300 stores. Many new doors are in rural areas, where Dollar General plans to roll out a buy online, pick up in store option at select locations. It’s primary customer base are low- and middle-income consumers in rural and suburban areas.

Dollar Tree

Slated new stores: 350

Backstory: This dollar-store operator has two brands, Dollar Tree and Family Dollar. For 2019, the company plans to open 350 Dollar Tree stores. The company is also closing 390 Family Dollar locations, but it plans to convert more than 200 of those sites to the Dollar Tree nameplate.

Five Below Inc.

Slated new stores: 145 to 150

Backstory: This extreme value discounter tries to keep prices at $5.00 and under, with many items closer to $1.00. Earlier this year, president and chief executive officer Joel Anderson told Wall Street analysts the company would test higher prices on some items, even slightly over $5.00, due to the impact from tariffs as it continues to move production away from China. The big box retailer is also testing out a higher-price concept called 10 Below, consisting of carveout sections in six Five Below stores, where products, consistent with the name and Five Below theme, are priced $10 and under.

Ross Stores

Slated new stores: 100

Backstory: The off-pricer plans to add 100 new stores this year, comprised of a total of 75 Ross Dress for Less locations and 25 DD’s Discounts. The retailer on Monday said it has so far opened 22 Ross and six DD’s stores across 10 states. Jim Fassio, president and chief development officer, said, “These recent openings reflect our ongoing strategy of targeting growth in both established regions and newer markets.” He added that the company is “confident in our ability to grow to 2,400 Ross Dress for Less and 600 DD’s Discounts locations over time.” Ross Stores currently operates 1,523 Ross stores across 39 states and 249 DD’s in 18 states.

Target Corp.

Slated new stores: 23

Backstory: This big-box discounter is expected to open 23 new stores this year. It opened seven small format stores, bringing that total to 78 stores. These stores are in city centers, dense suburban areas and on or near college campuses. According to Telsey Advisory Group’s Joseph Feldman, these stores are closer to younger and urban consumers, which should further grow sales and boost digital expansion. On top of that, Target is on track to refurbish 300 stores this year. It operates 1,853 stores in the U.S. Furthermore, the discounter said on the company’s Bullseye blog, it plans to open 26 stores in 2020 and so far has plans for another seven in 2021.

TJX Cos. Inc.

Number: 60 stores in the U.S. and 80 stores across Canada, Europe and Australia for TJ Maxx and Marshalls, and 10 Sierra Trading Post stores.

Backstory: TJX, an off-pricer, plans to grow its store base domestically and internationally, growing total global doors to more than 4,500 locations. It’s much smaller and lesser known concept Sierra Trading Post, which focuses on outdoor recreation and fitness apparel and gear, is slated to open 10 stores, bring its store count to 45 sites. In addition to the TJ Maxx and Marshalls nameplates, it also operates HomeGoods, for which it plan to open 65 new doors in the U.S., bringing the total store base to over 800 sites. And don’t forget HomeSense, the much smaller concept that’s slated to open 15 stores this year, bringing the total door count to 31, although TJX has said the nameplate could see 400 stores locations over time.

Walmart Inc.

Slated new stores: Under 10 stores in the U.S., and more than 300 new stores overseas, primarily in Mexico and China.

Backstory: Walmart U.S. said it expects to open fewer than 10 stores in 2019, but Walmart International is set to open “slightly more than 300 new stores,” the mass discounter said in February when it reported fourth quarter and full-year results for 2018. When the mass discounter reported first-quarter results in May, it indicated that initiatives have been on the customer experience: introducing Walmart Voice Order for online grocery orders; launching online pet pharmacy Walmartpetrx.com; introduction of Sofia Vergara’s denim line, as well as kids fashion through a partnership with Kidbox, and a partnership with Affirm to allow customers to make purchases at Walmart stores and online, and pay over time.