Big Lots is opening 500 stores
By Nathaniel Meyersohn, CNN Business
Big Lots is betting shoppers will still want to buy cheap couches and pillows in person for years to come.
The discount home furnishings’ chain said Monday that it plans to open more than 500 new stores over the next several years following a decade in which it put its expansion on pause. Big Lots will open around 50 new stores in 2022 and then 80 or so annually. The chain will add stores in existing markets, rural and small towns, and in new areas, the company said in an investor presentation.
Big Lots currently has some 1,400 stores in 47 states.
The company’s announcement is a sign that discount chains believe they are largely immune to the consumer shift to online shopping. Last year, dollar store chains made up almost half of all new stores opening in the United States, while other discount stores such as Five Below, Burlington, TJX and Aldi expanded.
No-frills stores, with their large, bright white and orange signs have a widely eclectic mix of merchandise — everything from mattresses, lamps and kitchen appliances to toys, snacks, pet food and cleaning supplies. Executives at the quirky chain refer to its target customer as “Jennifer” and focuses on “being the authority on price and value to Jennifer.”
Big Lots was deemed an essential retailer early in the pandemic because it sells food and household staples, which allowed it to stay open while other furniture chains closed due to Covid-19 restrictions. The company benefited as housebound shoppers redecorated and updated their homes and spent more on their backyards. In 2020, Big Lots’ comparable sales increased 16.1%.
But the company struggled last year, as Big Lots’ comparable sales dropped 4.7% in 2021 through October, its latest results. Like other discount stores with low-cost operating models, Big Lots was also hampered by supply shortages and higher labor, shipping and transportation costs.
On Monday, Big Lots said it has seen a “softening of traffic and sales trends” since early January, which it attributed to the spread of the Omicron variant and bad weather across the country. Big Lots lowered its sales expectations for January as a result.
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