Tractor Supply Achieves Store-level Inventory Quantity Visibility and Surpasses 27M Loyalty Members as It Preps for Expansion

Jamie Grill-Goodman
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Tractor Supply will offer scholarship recipients career opportunities at its stores or distribution centers while they are pursuing their education and will earmark internships at its Store Support Center each year.

Tractor Supply Co is busy ticking off boxes across the organization.

The rural lifestyle retailer will convert 81 Orscheln Farm and Home locations to Tractor Supply stores over the next 15 months, after closing its acquisition of the chain on October 12. It’s also upping its digital game, growing loyalty members, and addressing labor challenges with a just announced new scholarship program.

During its third quarter of 2022, Tractor Supply added mobile app features such as “My Pet” and upgraded its in-store mode, CEO Hal Lawton said during the company’s earnings call. The “My Pet” digital shopping experience allows consumers to connect with a vet for guidance and recommendations. The retailer also rolled out inventory quantity visibility at the store level across all its digital properties.

In August, the company rebranded its pet-exclusive retailer, Petsense, to Petsense by Tractor Supply, and rolled out its Neighbor's Club loyalty program to these stores.  

“This expansion will deepen relationships with our existing customers and helped attract new pet customers to both banners,” Lawton said. “And while it's early, we are very pleased with our customers' response to these initiatives, with our Neighbor's Club membership already representing over 35% of sales at Petsense.

Neighbor's Club membership exceeded 27 million members and represented nearly 75% of sales in the quarter, Lawton noted. The program continued to help migrate customers up in their spending with Tractor Supply and during the quarter, the company reached an all-time high in high-value customers.

“A lot of those are new customers that have grown with us over the last two and three years. And as we gain new customers also in '21 and '22, they are following that kind of continued above historical average performance, both in their average purchase sizes in a year, their frequency of purchase with us, and also the expanding number of categories that they're shopping with us.”

[See also: 10 Hottest Retail Loyalty Plans in 2022]

Third Quarter 2022 Results

Net sales for the third quarter of 2022 increased 8.4% to $3.27 billion.

Comparable store sales increased 5.7%, as compared to an increase of 13.1% in the prior year's third quarter.

Comparable store sales for the quarter were driven by comparable average ticket growth of 7.0%, partially offset by a comparable average transaction count decline of 1.3%. 

Gross profit increased 7.4% to $1.17 billion from $1.09 billion in the prior year's third quarter, and gross margin decreased 32 basis points to 35.6% from 36.0% in the prior year's third quarter.

The gross margin rate decrease was primarily attributable to product mix from the robust growth of C.U.E. products as the company's price management actions and other margin driving initiatives were able to offset the impact from significant product cost inflation pressures and higher transportation costs.

Done Deal: Orscheln Farm and Home

Tractor Supply Company recently closed its acquisition of Orscheln Farm and Home after receiving clearance from the Federal Trade Commission (FTC). The retailer said it’s forecasting fiscal 2022 net sales of $14.06-$14.12 billion including about $75 million in sales from Orscheln, marking the first time in the history the company’s annual sales are forecast to be above $14 billion.

“We are committed to providing customers in the Midwest region with an expanded product assortment, a meaningful loyalty offering and enhanced digital shopping experience, and so much more that Tractor Supply is able to offer,” Lawton said on the call.

The purchase puts Tractor Supply on track to achieve a store base of over 2,100 Tractor Supply locations and a workforce of 50,000 team members.

Tractor Supply Addresses Labor Market With $5 Million Scholarship Program 

Lawton noted the labor market continues to remain “very constrained,” and the company expects this will remain the case for the foreseeable future, particularly on the front line. “As we move into next year, the labor market will be a key determiner of our country's ability to return our economy to sustainable conditions,” he said.

Tractor Supply isn’t resting on its laurels in this area. It announced a new scholarship program through its Foundation to support the next generation of farmers and rural lifestyle careers, including skilled trades.

The retailer will also offer scholarship recipients career opportunities at its stores or distribution centers while they are pursuing their education and will earmark internships at the company’s Store Support Center each year.

Each year for the next five years, the Tractor Supply Foundation will commit $1 million to the FFA Future Leaders Scholarship Fund by Tractor Supply, making it the largest agriculture scholarship fund of its kind. The Tractor Supply Foundation is partnering with the National FFA Organization for the program. The $1 million annual scholarship fund includes: 

  • 500,000 for 100 scholarships at trade schools and 2-year colleges for students pursuing a skilled trade with $5,000 scholarships
  • $500,000 will fund 50 scholarships for students pursuing agriculture-related four-year majors with $10,000 scholarships

“Tractor Supply is very proud to be an integral part of each community that lives and loves the Out Here lifestyle, and we want to do our part to ensure rural communities continue to grow and thrive for future generations,” CMO Kimberley Gardiner said in a press release. “With this scholarship, we can help so many young people overcome financial barriers to pursue the educational opportunities and experiences that are critical to rural America.”

According to the U.S. Bureau of Labor Statistics, jobs in agriculture and food science are expected to grow by 7% from 2018 to 2028. These jobs play an integral and important role in increasing food production to increase yield so that there is enough food to feed the world's population, which is projected to increase to nearly ten billion people by 2050.

"The strength of America and our food systems depends on vibrant and prosperous rural communities," said Erin Fitzgerald, CEO of U.S. Farmers & Ranchers in Action. “This historic scholarship program expands on Tractor Supply's commitment to lighting the path for the next generation of agricultural leaders across the country. As we look to this next decade of agriculture and beyond, Tractor Supply is meeting the moment and demonstrating true leadership in action."

To support the FFA Future Leaders Scholarship Fund by Tractor Supply, customers will have an opportunity to donate at checkout, either in Tractor Supply stores or online at The first fundraising drive will be held October 26 through November 6, 2022, with the goal of raising $1 million. FFA Future Leaders Scholarship Fund by Tractor Supply will open for applications November 1, 2022 to January 12, 2023. Eligibility is limited to FFA members.