While it’s still unclear whether the 2020 exodus from big cities like New York and San Francisco is a short-term blip or a long-term shift, one thing is clear: Retailers with a large presence in the suburbs are benefiting.
At Dick’s Sporting Goods, for example, which reported 20% increase in fourth-quarter sales, thanks in part to the influx of new shoppers at its stores. (As of last month, the retailer counted 728 stores across 47 states.)
CEO Lauren Hobart told analysts on a conference call this morning that the chain netted 8.5 million new shoppers during its fiscal 2021 year, and 2.5 million in the fourth quarter alone.
“We’re very pleased with the makeup of the new customers. They tend to skew a little younger … slightly more female and slightly more urban [compared to our traditional consumers],” Hobart said. “So we do think a lot of [this growth is driven by] the exits from the city or people engaged with the brand for the first time, and we’re working very hard to keep those people in our database and encourage second purchases. But it’s a big piece of our growth.”
Dick’s continues to expand at a time when other retailers are shrinking their store rosters. Last month, it opened five outposts — including a namesake location in Concord, N.C. (just outside Charlotte, North Carolina’s biggest city).
Other retail insiders, including David Simon, chairman, CEO and president of Simon Properties, are also bullish on the opportunity for stores in the suburbs. “All of the urbanization two, three, four years ago, the question was, ‘Why are the suburbs going to exist?’ ‘Everybody is going to live in an urban environment,’ he recalled on a recent conference call. “I’m telling you the suburbs are going to be hot. And our quality real estate is going to be where the action is for those well located suburban centers of commerce. And that’s going to be the big change coming out of the pandemic.”
For Dick’s, its store locations are only one of the big advantages it has heading into a post-coronavirus world. Hobart said on the call that all of the company’s primary categories — hardlines, apparel and footwear — are benefiting from consumer demand around athletic and outdoor.
While she’s confident the fervor around those categories will continue, Hobart acknowledged that competition was increasing.
“Some of the department stores are closing some stores, which should be favorable,” the exec said, when asked if there would be a shift in the competitive landscape this year. “But on the other hand, some of them are going after the athletic apparel space a little bit more aggressively, which will work the other way. So long and short of it, I don’t really see a meaningful change.”
Dick’s Sporting Goods Inc. reported better-than-expected fourth-quarter financial results, but was cautious in its outlook, which appears to have given investors a pause. Shares are down 6.5% in mid-day trading.
For the three months ended Jan. 30, the Coraopolis, Penn-based retailer recorded profits of $225 million, or earnings of $2.43 per share, versus the prior year period’s profits of $113.3 million, or earnings of $1.32 per share. Wall Street had predicted earnings of $2.28 per share. Revenues grew 19.8% to $3.13 billion, beating analysts’ estimates of $3.07 billion.