Will Big Lots continue to stand out after the pandemic?
There have been some surprising retail successes amid the novel coronavirus pandemic, despite the overall catastrophic impact on the economy. The latest example is a chain that had languished in recent years but just reported a boost from pandemic-era factors.
Big Lots has experienced a stock surge of 60 percent this year and seen record sales growth in its most recent quarter, according to CNN. The closeout retailer is known for its broad selection of furniture, mattresses, kitchen appliances, toys, snacks, pet food, cleaning supplies and a few other disparate categories. It carries seasonal merchandise as well, selling patio furniture and gazebos in the summer and Christmas tree- and fireplace-related products in the winter. The chain has 1,400 stores spread over 47 states, mostly in strip shopping centers.
Analysts attribute part of Big Lots’ success this year to its selection of food and staples, which allowed the chain to stay open as “essential” during the strictest period of the U.S.’s spring lockdown. It has also seen a surge in home goods, mattresses, kitchenware and other non-food categories.
Low-price/discount retail is one category that seems to be weathering the pandemic better than others. Big names in the space like Aldi and Dollar General have not only posted strong numbers throughout the pandemic, they have both announced plans to continue expansions. Unlike Big Lots, however, Dollar General and Aldi were both already experiencing growth and success in the months and years leading up to the pandemic.
Big Lots does demonstrate a pattern of thriving in hard economic times. During the U.S.’s 2008 economic recession, the chain did quite well. As things began to pick up a few years later, Big Lots began making changes to try to provide a slightly more upscale offering that would succeed in an expanding economy. In 2010 it announced it was opening 30 higher-end locations in strip malls home to more prestigious retailers.
Since the beginning of the pandemic, there have been some standout successes outside of the discount space as well. For instance, Best Buy experienced record online sales during its second quarter as well as a same-store sales increase, despite being appointment-only for the first six weeks of the lockdown.
- This discount retailer is crushing it during the pandemic – CNN
- Will anything slow Aldi and Dollar General’s roll if COVID-19 didn’t? – RetailWire
- Big Lots expects bigger things as economy rebounds – RetailWire
- Best Buy produces record results doing things different in the pandemic – RetailWire
DISCUSSION QUESTIONS: Is Big Lots’ success merely a pandemic-era anomaly boosted by seasonal interest in products like patio furniture or do you expect it to keep building on its current momentum? What might other chains learn from Big Lots’ recent success?