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America’s Fastest-Growing Retailers

Alexander E.M. Hess, Robert Serenbetz and Thomas C. Frohlich
NEW YORK, NY - MAY 07: People walk out of Whole Foods Market in the Brooklyn borough on May 7, 2014 in New York City. Whole Foods Market, an upscale grocery store that sells many organic and gourmet foods, has reported disappointing sales and profit outlooks. Shares for the company have dropped as much as 22% today, its biggest decline in years. (Photo by Spencer Platt/Getty Images)

Following the recession, retailers are growing once again and, increasingly, moving online. In the first quarter of 2014, retail sales were 2.4% higher than the same time the year before, largely helped by a 15% jump in e-commerce sales. Online retail is increasingly accounting for more and more of America’s shopping.

Yet not all retailers have adapted to a market where many Americans have less disposable income, and are increasingly choosing to shop online. Other companies, in turn, have become enormously successful by embracing these changes. Based on figures from the National Retail Federation’s (NRF) STORES magazine, compiled by Kantar Retail, 24/7 Wall St. identified America’s Fastest-Growing Retailers.

In 2013, Amazon.com’s U.S. sales rose by 27%, the most of any retailer. For some retailers, such as Tractor Supply Co., part of its continued growth comes from the fact that they sell products Amazon.com simply cannot, such as farm equipment and livestock.

Many other retailers have also moved online, embracing a more-targeted approach in order to set themselves apart from the competition. Bryan Gildenberg, chief knowledge officer at Kantar Retail, told 24/7 Wall St. that this kind of personalized approach, “makes buying much more enjoyable and finding what you want much quicker.”

Some retailers have benefited from the financial struggles facing many Americans. This includes Family Dollar, which targets low income shoppers and had 11% growth in sales in 2013. Others, such as Sherwin Williams, have benefited from more positive developments in the economy. An improving housing market helped the company’s sales rise by 18% last year.

And while many growing retailers are deeply impacted by changes in the economy, others are benefiting from evolving customer tastes. Both Whole Foods and Apple are among the fastest-growing retailers in America, and both have very strong brands aligned with changing consumer spending. Whole Foods’ commitment to organic food and Apple’s exceptional mobile product quality both resonate strongly with customers, who are often willing to pay more for these items.

While many of the fastest-growing retailers have different customers and products, they also have a great deal in common.Gildenberg noted that many retailers aimed "most of [their] energy at the middle of the market." However, he added that, recently, growth has generally been stronger among companies that target a specific segment of the population.

For example, he noted that Whole Foods and Family Dollar are much more similar than they might look at first glance. “They both target segments of the population that general mass retail, for whatever reason, doesn’t serve as well.”

The addition of new stores can also play an important role in driving sales growth. Excluding Amazon, which is exclusively online, all but one of the fastest-growing retailers increased their U.S. store count in 2013. The one retailer that did not do so, AT&T, has heavily invested in new store designs and has opened or renovated a number of locations. Gildenberg noted that store growth is currently quite strong among more specialized retailers with unique store concepts.

To identify America’s 10 fastest-growing retailers, 24/7 Wall St. reviewed STORES’ Top 100 Retailers report. The report is based on Kantar Retail’s estimates for companies’ retail-only sales, and includes the 100 largest companies by this measure, as well as their estimated number of stores. The companies on our list had the largest percentage gains in U.S. retail sales between 2012 and 2013. Sales figures listed do not include third-party sales. We also excluded Albertson’s and Ascena Retail Group from our list. These companies had retail revenue gains that were largely driven by transformative mergers and acquisitions.

America’s Fastest-Growing Retailers.

10. Starbucks
> 1-yr. retail sales growth: 9.4%
> U.S. retail sales (2013): $9.6 billion
> Total U.S. stores (2013): 11,513
> 1-yr. store growth: 3.5%

The international coffee retailer Starbucks continues to benefit from innovative business strategies. Management went beyond coffee when it embarked on its growth strategy to develop its menu by adding fresh bakery options and a healthy juice line through the acquisitions of La Boulange and Evolution Fresh. Over 400 new stores also helped the company’s sales to grow more than 9% in the fiscal year 2013. Following its acquisition of Teavana last year, Starbucks now hopes to transform the $90 billion global tea business, much as it has market for coffee.

9. Signet Jewelers
> 1-yr. retail sales growth: 9.5%
> U.S. retail sales (2013): $3.6 billion
> Total U.S. stores (2013): 1,471
> 1-yr. store growth: 10.4%

Signet Jewelers became a retail jewelry powerhouse through a series of mergers and acquisitions. By 2013, the company consisted of Kay Jewelers, Jared, Ernest Jones, and H. Samuel. Kay Jewelers and Jared make up over 75% of Signet’s total sales. The company reported a 9.5% U.S. sales growth in 2013, compared to the year before. Last year, Signet Jewelers’ U.S. division operated 1,471 U.S. stores, an increase of 10.4% from the year before -- the largest expansion among companies reviewed. Signet’s growth will likely continue, as it recently acquired Zale’s in February of this year. In addition, the company has plans to expand further into the bridal market.

8. AT&T Wireless
> 1-yr. retail sales growth: 10.2%
> U.S. retail sales (2013): $8.3 billion
> Total U.S. stores (2013): 2,179
> 1-yr. store growth: -5.3%

Telecom giant AT&T’s retail business generated over $8 billion in equipment sales for the company in 2013, a 10.2% jump from the year before. This accounted for just a small share of the company’s revenue, which exceeded $128 billion last year and included roughly $70 billion from its wireless segment. Likely helping equipment sales, AT&T’s subscriber count rose 3.2% last year, which likely helped equipment sales. The company has also been rolling out a new store design throughout the U.S., which could further boost sales.

7. Whole Foods Market
> 1-yr. retail sales growth: 10.3%
> U.S. retail sales (2013): $12.5 billion
> Total U.S. stores (2013): 347
> 1-yr. store growth: 7.8%

As the NRF points out, grocery chains tend to grow relatively slowly because the industry is so decentralized. Wal-Mart, for example, is perhaps the only grocery chain with a national presence. Whole Foods, which has made its name selling healthy higher-value food products, may not be far behind. There were nearly 350 Whole Foods Markets in the U.S. last year, an 8% increase from the year before. This was among the highest store growths nationwide. Whole Foods announced a strategy several years ago to expand its store count to 1,000. The company’s U.S. sales were also exceptionally strong, growing 10.3% to nearly $12.5 billion in 2013.

6. Tractor Supply Co.
> 1-yr. retail sales growth: 10.7%
> U.S. retail sales (2013): $5.1 billion
> Total U.S. stores (2013): 1,276
> 1-yr. store growth: 8.5%

Tractor Supply has rapidly expanded its U.S. store presence. There were 1,276 stores last year, up 9% from 2012, a larger increase than all but a few other companies reviewed by the NRF. According to some analysts, some of Tractor Supply’s success in recent years is due to its “Amazon-resistant” line of products, as baby chicks and tractors are difficult to ship. Like a few other companies on this list, part of Tractor Supply’s success may also be due in part to its movement into new markets. As of last year, perishable items, such as vegetables, herbs, and fruit trees, were available in roughly 500 Tractor Supply stores, according to YCharts.

5. Apple
> 1-yr. retail sales growth: 11.0%
> U.S. retail sales (2013): $26.6 billion
> Total U.S. stores (2013): 254
> 1-yr. store growth: 1.6%

Apple is one of the largest businesses in the world, with the highest market capitalization of any publicly traded company. In 2013, the company’s retail sales in the U.S. alone totaled $26.6 billion. Additionally, Apple has been praised for its groundbreaking strategies in different retail channels: brick-and-mortar retailing with the Apple Store, online with iTunes, and on mobile devices with the App Store. But while retail is a critical part of Apple’s business, the company’s strength comes largely from its products. Last year, the company sold over 150 million iPhones and over 71 million iPads, leading to global revenue of $170.9 billion.

4. Family Dollar Stores
> 1-yr. retail sales growth: 11.4%
> U.S. retail sales (2013): $10.4 billion
> Total U.S. stores (2013): 7,916
> 1-yr. store growth: 6.4%

Family Dollar Store is the second-largest discount store chain by store count in the United States. At the end of fiscal 2013, sales grew over 11%. The discount retailer added roughly 1,000 new items to meet consumer demand for basic necessities like groceries. The company also opened 506 new stores in the fiscal year 2013. In addition, it acted on its goal to improve its consumer’s shopping experience by renovating, expanding and relocating 830 stores this year. Family Dollar recently agreed to be bought by competitor Dollar Tree in a deal expected to intensify competition for America’s cash-strapped shoppers.

3. Chick-fil-A
> 1-yr. retail sales growth: 12.4%
> U.S. retail sales (2013): $5.2 billion
> Total U.S. stores (2013): 1,775
> 1-yr. store growth: 4.3%

Atlanta-based Chick-fil-A is found primarily in the South. However, residents of other regions of the country may soon have another fast food option, as the company continues to open new restaurants. In 2013, it reported 1,775 U.S. locations, a growth of 4% from 2012 and among the largest store growth rates in the nation. U.S. sales grew 12% to a total of nearly $5.2 billion last year, the fifth-largest growth among companies reviewed. The company has identified locations across the U.S., from the Northeast to the Midwest and the West Coast, as future growth areas.

2. Sherwin Williams
> 1-yr. retail sales growth: 18.1%
> U.S. retail sales (2013): $6.2 billion
> Total U.S. stores (2013): 3,685
> 1-yr. store growth: 8.5%

Paint supplier Sherwin Williams’ recent growth spurt is linked to recoveries in the U.S. housing market. The more new homes and renovation projects there are, the more paint will be sold. While the vast majority of the company’s sales are domestic, Sherwin Williams acquired Mexican company Comex’s U.S. and Canadian businesses.The acquisition added hundreds of stores and numerous factories to Sherwin Williams’s overall footprint, primarily in Canada and the U.S. Sherwin Williams’ U.S. stores increased by 9% to a total of 3,685, nearly the largest growth among stores reviewed.

1. Amazon.com
> 1-yr. retail sales growth: 27.2%
> U.S. retail sales (2013): $43.9 billion
> Total U.S. stores (2013): N/A
> 1-yr. store growth: N/A

Amazon.com is one of the world’s most revolutionary retailers. In 2013, its sales grew to almost $44 billion, a 27% increase over the year before. Amazon Prime, which offers free two-day shipping on over 20 million products, has also helped to boost the company’s reputation for innovation. Amazon’s mobile devices, such as the Kindle Fire HDX, and the Amazon app store have also likely further helped ramp up sales. Additionally, Amazon is exploring the groceries and household consumables market with two new businesses -- Prime Pantry and Amazon Dash. According to Kantar Retail’s Gildenberg, “Amazon continues to do an outstanding job of reaching more shoppers across more categories.”