Tractor Supply and Walmart Bet on Revamped Stores and Expanded Footprints

Liz Dominguez
Managing Editor
Liz
Tractor Supply

Two major retailers, Tractor Supply and Walmart, have seen significant growth from their reworked store strategies, and are doubling down on efforts as we move further into 2024. 

Hal Lawton, CEO of Tractor Supply, shared details about the company’s continued efforts in the brick-and-mortar space, which are being supported by changes across the supply chain through a strengthened distribution network. 

During the company’s latest earnings call, Lawton said Tractor Supply is building on its Life Out Here strategy, first introduced in 2020. The company has invested nearly $2.5 billion so far, with about 80% of that going toward growth initiatives like new and remodeled stores, new distribution centers, an upgraded tech infrastructure, and more. 


A Look at 2023 Success: 

  • Opened 70 new Tractor Supply Stores in 13 Petsense Stores
  • Converted 81 acquired Orscheln stores to the Tractor Supply brand
  • Total customer count increased 1% due to its Orscheln acquisition
  • Opened its ninth distribution center in Novar, Ohio and broke ground on its tenth distribution center in Mall mill, Arkansas
  • Average store volume increased from $4.5 million to $6.5 million annually per store
  • About 40% of stores are now in the company’s Project Fusion layout to optimize space productivity
  • Store expansions are driving loyalty, with Neighbor's Club adding more than 4 million new customers and representing 77% of sales for 2023
  • Tractor Supply is close to reaching its 200 store milestone and $225 million in sales in the Petsense brand

Building on its success last year, the company raised its new store growth target for 2024, adding on 200 stores to its previous target of 2,800 — a total addressable market of more than $180 billion. The company is also looking to open 10 to 15 Petsense by Tractor Supply stores in 2024.

“Our stores continue to be profitable in year one, cash flow positive at about the same point, and have a payback in two to three years. Our new store economics unlock sustainable growth and solidify our lead in the channel,” said Kurt Barton, Tractor Supply CFO. “Strong new store economics are a hallmark of Tractor Supply. As I reflect back on 2023, I continue to be encouraged by the resiliency of our business and the structural nature of it.”

Part of the company’s expansion strategy relies on Tractor Supply’s garden centers, with the spring of 2024 expected to see more than 450 new spaces to drive productivity and enter new categories. 

[Want to learn more? Tractor Supply will keynote Analytics Unite 2024! Register today!]

“Stores with our garden centers are attracting new customers at a faster pace than the rest of the chain,” said Lawton. “Additionally, our garden center stores are providing a multiyear comp benefit.”

Barton expects capital expenditures, including toward new store costs, to reach between $850 million to $925 million. The efforts will have significant support from the company’s ongoing investments in its supply chain and distribution centers, with Tractor Supply opening its tenth distribution center in Q2 of 2024. 

“Our distribution centers achieved a record year of productivity.The opening of our Novar [ph], Ohio DC in January 2023 allowed us to unlock savings across our network with the largest rebalancing of our stores ever. These investments were to enable the higher volumes of our existing stores, the continued build-out of our new stores as well as the acquisition of Orscheln.” — Hal Lawton, CEO, Tractor Supply

Online isn’t taking a back seat, however, as Lawton said the company is currently getting more visitors online than in-store. “We will leverage AI technologies to improve search, redesign our checkout, introduce a new refreshed homepage focusing on personalization that leverages our robust Neighbor's Club data.”

Walmart Ramps Up Store Strategy

John Furner, president and CEO of Walmart U.S, recently shared details about the company’s continued store expansion and remodel strategy. Over the next five years, the company plans to build or convert more than 150 stores while also remodeling existing stores, and much like Tractor Supply, the efforts are supported by a strengthened supply chain system

“I’m proud to announce our support for even more jobs by expanding and modernizing the facilities most core to our business: our stores,” said Furner. “These efforts represent millions of dollars in capital investment of labor, supplies, and tax revenue, which benefit their respective communities. And they’ll help us reach and serve even more customers.”

Rendering of Walmart Supercenter; Credit: Walmart
Rendering of Walmart Supercenter; Credit: Walmart

Remodeling plans include overhauling 650 stores across 47 states and Puerto Rico in the next year. This effort, says Walmart, will create tens of thousands of jobs, in addition to hundreds of jobs each time Walmart opens a new store.

Walmart will be converting one of its smaller locations to a Supercenter this year. New store plans include two new Neighborhood Markets in Santa Rosa Beach, Florida, and Atlanta, Georgia, this Spring. Additionally, the company is finalizing construction plans for 12 new projects that should begin later this year. 

“Our new and remodeled stores will reflect Walmart's Store of the Future concept, featuring improved layouts, expanded product selections, and innovative technology to help our associates better support our customers and make shopping more convenient and enjoyable,” said Furner. “Customers love this concept in the places we’ve already rolled it out, and we’re excited to transition more and more of our fleet.”

Other Store of the Future highlights:

These new and remodeled stores will better enable us to meet and exceed customer expectations whether in a store, online at Walmart.com, or through one of our mobile apps,” said Furner.

More Like This

X
This ad will auto-close in 10 seconds