Market Outlook 13 minutes Premium

Sector Overview: Mass Merchants — Dollar Stores Expand, Mass Merchandisers Digitalize and Costco Widens Its Lead Among Warehouse Clubs

Executive Summary

Each of our Sector Overview reports provides an essential briefing on a sector or market. In this report, we look at discount stores, mass merchandisers and warehouse clubs.

  • Macroeconomic data continue to support strong consumption.
  • Consumers embraced “cheap chic” during the Global Financial Crisis of 2007–2008 — and stayed at the value end of the spectrum.
  • Mass merchants are embracing private label, deploying technology such as robots to improve the shopping experience, be more efficient and take on Amazon.
  • Dollar stores continue lead retail in terms of growth in new stores.
  • The group, in general, has not widely embraced e-commerce, however Costco, Target and Walmart are aggressively doing so.
  • Costco is leading the pack in terms of comparable sales growth and driving an acceleration in its ecommerce efforts.
  • Activity in the sector is benefiting from the return of BJ’s Wholesale Club as a public company and startups that are leveraging e-commerce to take on the incumbents.

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