Big Lots is getting bigger.
The discount retailer is planning to open 500 new stores over the next several years, with 50 slated for 2022 and 80 opened every year thereafter. The company hopes to add these stores in both existing markets and new areas.
The pandemic has been a mixed bag for Big Lots, which has about 1,400 stores. The chain was allowed to stay open as an essential retailer thanks to its mix of products, while competing furniture retailers had to shut their doors just as a shut-in consumer base was eager to redecorate. Not surprisingly, Big Lots' comparable sales increased 16.1% in 2020.
However, in 2021, sales dropped by 4.7% through October due to supply shortages and increasing labor, shipping, and transportation costs. The chain has also seen a "softening of traffic and sales trends" in 2022 and has lowered sales expectations for January. The dip is likely thanks to bad weather in many parts of the country and the spread of omicron.
Discount retailers are hopeful that inflation-weary customers will keep shopping. Last year, about 45% of the 3,597 large retail chain store openings were by Dollar General, Dollar Tree, and Family Dollar, according to Coresight Research. Another discount retailer, Burlington, outperformed expectations last year and plans to expand to 2,000 stores from its current 761 with a new, smaller store format.
Meanwhile, traditional department stores and mid-tier retailers aren't doing as well. Macy's has a three-year plan to close 125 of its stores. Bed Bath & Beyond recently announced that nearly 40 of its stores would be closing in the near future. And dozens of well-known chains declared bankruptcy in 2020 and 2021 as the pandemic wreaked havoc on business.