Location. Location. Location. Retailers have to weigh how many stores they have compared to their total revenue. Too many stores can cause corporate losses. Too few mean a retailer may miss out on sales in the geographic areas where it is not located. And, the number of locations a retailer can afford, successfully, over time, varies as well. Walmart started as a smaller retailer in Arkansas in 1962. As its company strategy gained success, it added a number of locations each year for decades. Today, it is the largest company in America. Another, older retailer, Sears, was the largest retailer in the world. Founded in 1893, its customers began to migrate to competition, and it had to cut stores by the hundreds. It is essentially out of business today.
No single type of retailer dominates the chains with the most stores. Some are discount retails, other big-box retailers. Some are consumer electronics stores. Others are drug store chains, and some are in the grocery business.
One challenge every one of these retailers faces is e-commerce. The most successful company in this sector is Amazon.com. It has been blamed for the disintegration of retailers like JC Penney, Sears, and Kmart. This is an oversimplification. Many of these chains did little to make their stores more modern. Some had poor mixes of merchandise. Others did not spend enough on marketing.
The retailer with the most locations in the United States is Dollar General with 17,348. It recently announced it would add 1,000 new stores for its Popshelf branded stores. Dollar General’s strategy is to have modest-sized stores in neighborhoods.
It is hard to argue with the Dollar General strategy. Revenue in the most recent quarter announced was $8.5 billion, up 3.9% despite the effects of the COVID-19 pandemic. Net income for the quarter was $478 million. When earnings were released, Todd Vasos, Dollar General’s chief executive officer, said “We are excited today to announce our real estate growth plans for fiscal year 20222, which consist of nearly 3,000 real estate projects in total, including 1,110 new stores.”
By almost every measure, Dollar General is among the most successful retailers in America. This is confirmed by its plans to open stores. That will work until it has too many.
Click here to see which retailer closed the most stores last year.
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