If retail consumers have proven anything in the last two years, it’s their endurance. Since 2022, the U.S. retail sector has faced a 40-year inflationary high, almost a dozen interest rate hikes, limited new supply, and frequent closures and bankruptcies. Remarkably, during that time, demand for retail space rose consecutively each year, including an increase of over 53 million square feet in 2023. According to CoStar, over half of all new leasing activity came from the food and beverage, discount, off-price, and experiential segments.
Supply is slower to catch up as 49 million square feet of retail space was delivered last year, a volume 35 percent lower than the latest 10-year average. Still, steady rent growth—3.1 percent year-over-year—and a substantial boost in retail sales suggest a strong growth period for the sector this year. Several brands have announced plans for new stores, innovative shopping concepts, and revamped customer programs. Here are the top retailers positioned for growth and expansion in 2024.
Price-Conscious Retailers Growing Fastest
Dollar General
Price-conscious retailers like Dollar General make up the fastest-growing retail category, suggesting consumers remain skeptical despite income increases, falling inflation rates, and general wealth growth. Dollar General is committed to opening 800 new stores in 2024.
Five Below
Specialty discount retailer Five Below has announced plans to open 600 new locations for its next fiscal year. According to Placer.ai, in Q4 2023, Five Below’s monthly store visits grew from 14.6 percent to 22.1 percent year-over-year.
Convenience and Grocery Maintain Value
7-Eleven
In a recent $1 billion agreement, 7-Eleven announced the addition of 204 stores to its operations. The acquisition includes locations in West Texas, New Mexico, and Oklahoma. The convenience store was also named one of the nation’s fastest-growing retailers by the National Retail Federation (NRF).
Aldi
Budget-friendly grocer Aldi plans to add 800 U.S. stores by the end of 2028 through a combination of new openings and store conversions. Its five-year, $9 billion plan includes opening nearly 330 stores across the Northeast and Midwest, expanding in hubs like Phoenix and Southern California, and entering new cities like Las Vegas.
Fierce Competition Fuels Growth
Harbor Freight Tools
Challenging its competitors like Home Depot and Lowes has benefitted Harbor Freight Tools. The home improvement store, also named one of NRF’s fastest-growing retailers in the U.S., saw a year-over-year increase in visits for each month during 2023 and a sales growth of 13.1 percent, or $620 million, in 2022.
Ulta Beauty
It’s worth noting that Ulta Beauty and Sephora each earned a spot on NRF’s Hot 25 Retailers list. Ulta inched ahead in the beauty space in terms of U.S. sales growth, which reached 18.3 percent (or $1.6 billion) by 2023. On top of that, Ulta grew its active loyalty program members from 30.7 million in 2020 to 40.2 million in 2022. Over 94 percent of Ulta’s annual sales came from loyalty members in both years.
The Fast-Food Renaissance
Dutch Bros
The race for America’s best cup of coffee is closer than ever. Nation’s Restaurant News ranked Dutch Bros among the top three coffee and bakery chains in the U.S., behind Starbucks and Dunkin’. Dutch Bros, known for its customer loyalty and cult-like status, plans to open another 165 locations this year.
Jersey Mike’s
Jersey Mike’s has one of the most aggressive growth plans of all U.S. retailers. CEO Peter Cancro told QSR Magazine that the company expects to open 350 stores in 2024, another 350 stores in 2025, and 450 stores in 2026. These additions will supplement Jersey Mike’s existing footprint of over 2,500 locations.
The Appeal of Off-Price Apparel
Nordstrom Rack
Nordstrom’s off-price outlet store, Rack, was a significant source of sales growth for the retailer, with net sales up 14.6 percent year-over-year, while Nordstrom’s department store sales dropped 3 percent. The company plans to open 22 new Nordstrom Rack locations this year in California, Florida, Georgia, North Carolina, Ohio, Texas, Arizona, Illinois, Indiana, Nebraska, New York, and Tennessee.
Ross Dress for Less
Ross Dress for Less, a discount department store chain, plans to open 500 new stores this year and expand its near-nationwide presence after recently entering the Minnesota and New York markets.
Big-Box Doubles Down on Footprint
Target
While more gradual than other retailers, Target’s expansion plans include adding 300 new stores over the next 10 years. CEO Brian Cornell disclosed that the new locations will follow a large store format and provide broader food offerings. Additionally, Target plans expansive remodels for existing stores after reporting 2.0 to 4.0 percent average sales increases for renovated locations.
Walmart
Walmart is taking a similar approach to Target. The big-box retailer plans to add 150 stores over the next five years and remodel 650 existing stores in almost every U.S. state this year. Most added stores will be newly constructed and supplement its existing footprint of 4,600 stores.
