The fastest-growing retailers

New data illustrates which stores have proven resilient to headwinds, and which are poised to take an even larger market share next year.

By Minyanville.com Aug 19, 2013 5:10PM
Though Macy’s (M) and Wal-Mart (WMT) blamed their weak Q2 earnings on reasons ranging from a shaky economy to payroll tax cuts to a hesitancy of non-essential spending by consumers, some retailers are still flourishing -- including those you may never have considered, or even heard of.

Here are some of this year's Top 100 Hottest Retailers, as ranked by year-over-year percentage sales growth, and based on Kantar Retail data provided by the National Retail Federation.
Grocery
On its recent Q2 earnings call, Wal-Mart U.S. CEO Bill Simon cited nearly $1 billion in growth for the quarter in the store’s grocery sales (which includes food and consumables), in part thanks to efficiencies in transporting the product from farm to shelf.

Image: Credit card purchase (© Marc Romanelli/Photodisc/Getty Images)Though the numbers are promising, the grocery business represents a $450 billion opportunity and one that Bryan Gildenberg, chief knowledge officer at Kantar Retail, says tends to be "a bit of a mirror as to what is happening in retailing in general." 

In its data, Kantar recognizes the latest sign of healthy demand for natural foods retailers, particularly with 62% year-over-year sales growth seen in specialty grocers like Sprouts Farmers Market (SFM) (whose shares have more than doubled after the initial public offering on August 1), and The Fresh Market (TFM), a North Carolina-based chain that has 129 locations in the United States, and has experienced 20% year-over-year sales growth.

If consumers begin to prefer such niche specialty retailers over larger brands like Whole Foods Market (WFM) (ranked No. 21 on the list) and Kroger (KR) (No. 84), these up-and-comers may in fact be poised to capture an even larger share of the market. That said, Amazon’s (AMZN) latest move into grocery delivery service with Amazon Fresh (currently available only in Los Angeles and Seattle markets) might prove to be an even more significant game-changer for the grocery segment as a whole.
 
Apparel
Though Nordstrom (JWN) recently cut its full-year earnings outlook, the company reported second-quarter profits rose from $156 million a year earlier to $184 million this year, signaling a positive sign for higher end retail.

Likewise, Kantar’s top 100 list includes both established and up-and-coming brands in this category. With 63% year-over-year sales growth, Michael Kors Holdings (KORS) takes the No. 2 spot on Kantar’s Hot 100, with J.Crew ranking at No. 12, and Ralph Lauren (RL) at No. 23. Lifestyle and active wear brand Lululemon Athletica (LULU) takes the No. 4 spot for growth, despite its recent scandals -- including its sheer yoga pants debacle and the subsequent investor class action lawsuit regarding this matter. Whether the No. 5-ranked Under Armour (UA) will capture customers in the wake of Lululemon's fallout (or whether loyal Lululemon customers are even swayed by these events) remains to be seen; the company's shares gained 24.63% in the last three months.

Foot Locker (FL) and Dick’s Sporting Goods (DKS) ranked at No. 29 and No. 32, respectively, for positive year-over-sales growth. Genesco (GCO), the parent company of retail store brands like Lids and Journeys, ranked at No. 91 with 6.2% year-over-year sales growth. Whether due to price-sensitive fashion lovers, a rocky economy or a combination of these two factors, brands like H&M (HMRZF) at No. 8 on the list, Rue 21 (RUE) at No. 13, and Chicos (CHS) at No. 16, all had double-digit year-over-year sales growth.

TJX (TJX), parent company of four separate segments including Marmaxx, HomeGoods, TJX Canada, and TJX Europe, ranked No. 34. 
 
Tech/Online
A list of the hottest retailers wouldn’t be complete without Apple Stores/iTunes (AAPL) and Amazon, which were ranked No. 5 and No. 7, respectively, for positive year-over-year sales growth. Names like AT&T Wireless (T), which was recently ranked first place for "overall purchase experience" among wireless service providers in a J.D. Power Wireless Purchase Satisfaction Study, also earned accolades at the No. 17 spot on the Hot 100. Verizon Wireless (VZ) ranked No. 71 with 7.6% year-over-year sales growth.
 
Convenience and discount club stores
Gildenberg predicts that club, drug, and dollar stores will continue to be successful in the next few years, though the competitive advantage will be found in those who remain successful in curating quality products and offering a high level of customer convenience.

Kantar’s list includes major players like Costco (COST), ranked No. 42; Dollar General (DG), which came in at No. 62; CVS Caremark (CVS), which ranked at No. 83; and lesser established brands like Iowa-based Casey’s General Stores (CASY), which ranked No. 74 with 7.6% year-over-year sales growth; and retailer-owned cooperative, ShopRite, which was ranked No. 90.

Particularly in the wake of health care industry reform, which could amount to a $15 billion boost in prescription medicine spending by consumers, this is one segment that may change dramatically in the next few years and boost smaller retailers onto a whole new playing field.

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83Comments
Aug 19, 2013 9:48PM
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Yo. Fastest growing food store. How about the food pantry. Salvation army for clothing, and siphon hoses for gas.  Who can afford to go to any of the stores listed above. Let's be real. Regardless of who says what, the economy sucks and if the people in the congress would get off their butts and go to the needy neighborhoods they would see the truth.
Aug 20, 2013 4:30AM
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I guess WalMart sales were not as high as they should have been because of the way the managers. manage the stores  Sometimes when I go to a WalMart Store I see people leaving there future purchases in the baskets because they never have enough cashiers to process the sales out in a timely manner.

Aug 19, 2013 10:35PM
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Can't afford to shop for much the past several years.
Aug 19, 2013 11:45PM
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Untill the corprate/government greed is stopped nothing will change.
Aug 20, 2013 6:39AM
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Reporter, Americans have run out of money, Mr. Laffer, I don't think they've run out of money. EXCUSE ME! Yes we have run out of money Mr. Laffer. I make less today than I did in 2007 at my union job. No raises, insurance copay raised to 20 %. I cannot spend what I don't have. At some point Mr. Laffer, you can't get blood from a rock!
Aug 20, 2013 7:06AM
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Not enough jobs created to cover the population growth, of the welfare rats that won't work, and stay home and make more babies for the rest of the country to take care of I'd say.
Aug 20, 2013 9:18AM
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If trader Joe's was in more cities, no one would shop at walmart.
Walmart is down because people don't like to shop there.


Aug 19, 2013 10:58PM
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I would take anything that Kantar Retail and their "chief knowledge officer " (whatever the hell that is) with a grain of salt. They aren't even aware that ShopRite stores are a retailer-owned cooperative of grocery stores, not club, drug or dollar stores. And to think that Amazon Fresh is the future of grocery is lunacy. It may have its niche, especially in bulk non-perishable items, but people will always want to see their perishables before purchasing.

Aug 20, 2013 10:57AM
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I have a question for everybody.  How's that "service economy" treating you now that we've shipped all of our industries to other countries?
Aug 20, 2013 7:02AM
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I would very much caution expecting much growth in retail. 

.

Aug 20, 2013 10:23AM
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How does the financial world and our Govt expect people to spend on extras when all their money goes into their gas tank or toward clean foods as they don't wish to consume GMO food!

 

There is no extra to spend on extras, as banks also refuse to raise the Savings Interest Rates which once offered many American the excess needed to spend.

 

The current price of gas has raised the price of everything and with lack of a Savings Interest rates where and what does our Govt. or the SEC expect us to get the funds to spend!

 

I also find it beyond disturbing when clothes are advertised as inexpensive with a prices tag of $100 or more.  

Aug 20, 2013 4:28AM
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I guess WalMart sales were not as high as they should have been because of the way they treat there managers. don't manage the stores right. Sometimes when I go to a WalMart Store I see people leaving there future purchases in the baskets because they never have enough cashiers to process the sales out in a timely manner.

Aug 20, 2013 10:33AM
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To all of you consumers complaining about high prices and your dollar not buying what it used to, you have the administration and the fed to blame for printing dollars and devaluing our currency (i.e. quantitative easing).  Food is a commodity that priced on the global market (raw materials go into making processed food).  Food prices will rise as our dollar get deflated.  The dollar today only buys $.80 as it did just a few years ago.    That is also why companies are doing well, because the fed is pumping the dollars into the financial markets.  They're not handing it out to you and me!!!   Get smart and realize that these policies have the worst affect on those who can afford it the least.   Start to hold this administration accountable for what's going on!
Aug 20, 2013 11:22AM
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I hear a lot of  that NOBODY has any money...yet, I live in Buffalo, NY and anywhere I go, people are out spending money. I went to Cedar Point a couple months ago...packed, all the hotels in the area were packed...and most restaurants had a wait....I also stopped in Cleveland on that trip and boy there were a lot of people spending money there...then I go to Pittsburgh this past weekend and everything is busy...every restaurant was full....people everywhere paying for everything, including parking....I tried to but tickets to the US Open in NYC, hard to get any....sports games sold out in every town, people attending concerts that cost $100 a ticket or more....so, if NOBODY has money, who were all these people? The economy is not great, I agree...but people are spending money
Aug 20, 2013 8:17AM
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I loved my Sprouts market in Tucson near Oro Valley.  I don't live there anymore, but wish I did have access to a Sprouts again.  I too am on a budget, but one of the things Sprouts does really well is bulk bins... for everything from nuts to flour and oats to beans to candy.  Bulk bins are a way to save money no matter where you go and the Sprouts in Tucson had about 4 or 5 half aisles of nothing but bulk bins.
Aug 20, 2013 7:43AM
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America's fastest growing retailers are sub-economic and don't have cinder block boxes sprouting up across the country. The big box era of retail is over. The cheap knock-off imported good era of retail is over. The business platform doesn't work-- literally. Go back to the drawing board for ideas or get a real job.
Aug 19, 2013 9:59PM
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Yes a Reagan advisor would suggest all our problems are because the rich are paying too much in taxes yet we tried the Reagan trickle down plan twice and real wages for everyone except those at the very top are way lower than before trickle down began. If trickle down was the answer why didn't the boat lifting occur when Reagan cut taxes in half?

 

Why didn't Bush's 400 billion a year tax cut for the rich lead to more jobs? Bush averaged 50,000 jobs a month over 8 years the lowest rate since Eisenhower and only half the jobs needed to cover population growth. The GOP defenders always blame Democrats in Congress for the spending but every driver of the debt were Republican policies. Yes Democrats allowed Reagan everything he wanted. One trillion additional military spending while cutting revenue and aid to states and they supported Bush's tax cuts, wars and drug plans but they were still Republican plans.

Aug 20, 2013 9:35AM
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I went to my local Shoprite this past weekend. The prices were 20% more than the prior week. VIVID was "on sale" for $6.89!!! The food prices keep rising, that this market is now selling crap, like towels and toys! It is turning into a junk store. This is the cheapest market in my town, We have Wegman's, Weis and McCafferys. None of which I can afford and I am not feeding kids. No wonder people eat out, for that money they would rather be served! The meats are questionable and the produces looks terrible. Not really complaining about this store per se but food prices, since this fiscal crisis has gone into the starusphere! Yes, Amazon is selling in CAlifornia nad Seattle, because those are the only people that can afford to pay their prices!
Aug 20, 2013 8:46AM
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Cut Welfare, Aid to Dependent Children and Food Stamps if you want to boost the economy.  This would allow the government to trim the budget and ease  retail and income taxes. People must be responsible for their own lives.  If Welfare folks went to work, we would not need to let illegal immigrants remain in the U.S.

Where are the politicians who are brave enough to tackle the growing dependent population?

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