Amid The Carnage, Some Retailers Forge Ahead With Growth
German grocery chain Aldi plans to open 70 more American stores by the end of this year, entering new U.S. markets (including metro Phoenix) and adding a regional headquarters and distribution center in Alabama in 2021. Currently the company has 2,000 stores in the United States.
The grocer is also ramping up its e-commerce offerings and the rollout of curbside pickup, which will be available at about 600 of its locations by the end of July, the company said in a statement. Aldi began the curbside practice when many other grocery stores did, not long after the onset of the coronavirus pandemic.
The new stores are part of a previously announced five-year expansion plan dating back to 2017 that is continuing, despite current conditions. Under that plan, the company is investing $3.4B to grow from 1,700 units at that time to 2,500 stores nationwide by the end of 2022.
Though its expansion began before the current health crisis, the retailer is taking advantage of plum times for the grocery industry, as opposed to much of the rest of retail. Overall U.S. retail sales dropped 8.1% during the second quarter of 2020 compared with the same quarter last year, according to the Census Bureau, and 7.5% compared with the first quarter of 2020.
By contrast, grocery store sales were up 13% in Q2 2020 compared with the same quarter in 2019, as the pandemic redirected American's food consumption habits toward their own kitchens. Restaurant and bar sales were down 38.8% quarter-over-quarter in Q2 2020.
Grocery stores aren't the only retail category doing relatively well during the pandemic. Building material and garden equipment and supplies dealers, the DIY stores of the country, enjoyed 12.8% higher sales in Q2 2020 compared with a year earlier, presumably as people stayed at home more.
"During the last three weeks of April and continuing into the first two weeks of the second quarter, we have seen a significant acceleration to double-digit comp sales growth with strong performance across most of the store, as customers turn to repairs and home improvement projects," Home Depot Chief Financial Officer Richard McPhail said in May, during the company's most recent earnings call.
A few retail sectors, hit hard during the first months of the pandemic, seem to be bouncing back. Sales at electronics and appliance stores, for instance, took a dive of 34.2% during the second quarter compared with a year ago, according to the Census Bureau. But sales in June 2020 spiked 37.4% compared with May.
"Like many other retailers, we saw sales benefit during the last three weeks of the quarter, as customers undoubtedly chose to spend some of their government stimulus money on the products and services we provide," Barry said.
More recently, Best Buy reported that sales for its fiscal second quarter were up 2.5% from a year ago, spurred by a 15% jump in sales since it began reopening its stores in mid-June.
Even some restaurant chains are eyeing expansion. Chipotle Mexican Grill, for example, has been contacting some of its operators and offered to buy out their remaining leases, Restaurant Business reports. As a larger chain with strong financial backing, Chipotle seems to be looking for prime new sites or lower lease costs, planning ahead for a recovered economy.