Growth through acquisitions, to discount retail, to online shopping, to home goods… this year’s list reflects clear trends.
If you’re not familiar with the NRF’s Hot 25 Retailers, compiled by Kantar, the list ranks the fastest-growing retailers with $300m+ revenue in the US, based on a percentage of their domestic sales growth between 2019 and 2020.
Now, looking at the list there are some obvious winners.
After all, consumer buying habits certainly changed between 2019 and 2020 as the world quickly adapted to the pandemic.
But more interesting than the obvious growth of online retailers, are the other key insights and takeaways we can glean from this list.
Here are the 5 retail trends we see from the 2021 Hot 25 Retailers list.
#1 – Online Retailers Crushed It
Is it obvious? Sure. But the fact that the top 7 on the list are all online retailers can’t be ignored.
Here are some of the highlights:
- The #1 ranked retailer on the list is the alcohol retailer, Wine.com, who closed the 2020 calendar year seeing 119% year-over-year growth. It seems people drank a lot during the lockdowns.
- Homeware & goods continued to be an area of focus for consumers (more on this below). Online retailers Overstock.com (#2) & Wayfair (#4) topped the list in this category.
- UK-based online fashion retailer Boohoo Group (#3) who targets young, hip people with brands like Nasty Gal and PrettyLittleThing came in as the highest ranking fashion retailer.
- Boxed.com (#6) and Amazon.com (#7) showed that people still buy everyday stuff, and that consumers are more than comfortable buying online and having goods quickly shipped to their door.
#2 – Growth Through Acquisitions
#9 on the list is EG Group, a privately-held British retailer that operates gas stations, fast food outlets, and big-box retail in Europe, the United States, and Australia.
Coming off a string of debt-funded acquisitions in 2017-2018, in 2019 and 2020 they continued the trend snatching up US and UK-base chains.
Here are some highlights:
- In 2019, EG acquired:
- 54 Fastrac branded service stations.
- 69 service stations operated by Certified Oil.
- The Cumberland Farms company.
- In 2020, EG:
- Became KFC’s largest franchisee in the UK through the acquisition of 145 KFC outlets in the UK & Ireland.
- Purchased the UK-based Asda chain from Walmart.
- Acquired Schrader Oil which included 18 service stations.
#3 – People want “Good Stuff Cheap”
Looking down the list, the economic impact of the shutdowns, layoffs, and restrictions appeared to drive consumer buying decisions.
Take Ollie’s Bargain Outlet (#10) whose motto is “Get Good Stuff Cheap”. In 2020, Ollie’s saw its gross profit increase by over 30% year-over-year.
When you add Grocery Outlet (#16) and Dollar General (#17), both brick and mortar discount retailers to the list, it’s clear there continues to be a growing demand for discount retail.
#4 – People Want To Spend Time In Great Spaces
As we were all forced to work, cook, exercise, get haircuts, watch movies, and basically live 100% of our lives at home, it’s no surprise that consumers took their freed up disposable income, time, and creative energy and poured that into creating better spaces.
Just look at this list:
- At Home (#11).
- Tractor Supply Co. (#12).
- Ace Hardware (#14).
- Lowe’s (#15).
- The Home Depot (#18).
#5 – People Want To Get Active & Pickup New Hobbies
Wine.com being the #1 spot on the list isn’t the kind of hobby or activity we’re talking about (although we’ve witnessed a huge boom in both alcohol and cannabis retailers here in Canada).
The inclusion of Hibbett Sports (#13), JD Sports (#21), and Lululemon (#22) on the list proves that people were looking to live a more active lifestyle and spend money on their hobbies, even if that just meant wearing active-wear while watching Netflix.
What about your growth?
As retail environment design-builders, we’re always looking for the most interesting and relevant trends – both on the retailer and the consumer side.
So as always, we recommend taking a moment to take note of these trends, get inspired, and then get to work on your own growth plans.
If you’re ready to talk about what’s possible for your retail locations, fixtures, and merchandising programs, give our team a shout and we can help you hit your next growth target.