Unlike retailers seeking growth in cities, Tractor Supply targets consumers living the country life
If you’ve got space in the yard and a taste for fresh eggs, you’re in luck.
Chick Days, an event that brings live chickens of various breeds to Tractor Supply Co. TSCO, -1.29% stores, starts Monday and lasts through April 28.
Shoppers can also buy a coop, feed, incubators, and anything else they need to get their chicken farm up and running.
“We sell everything else but the tractor,” said Mary Winn Pilkington, vice president of investor relations and PR at Tractor Supply. “Anything for an authentic rural lifestyle.”
While many retailers are flocking to the city, targeting high-spending urban dwellers and young, millennial professionals, 80-year-old Tractor Supply is happy to live the pastoral life, and help others who want to do the same.
“We like to say that our team members not only know our customers names, we know their animals names,” Pilkington told MarketWatch.
Walmart Inc.’s WMT, -0.43% Jet.com is building out more merchandise and services for those living in cities. Target Corp. TGT, +1.18% is expanding its small-format stores in cities (as well as college towns and other high-density areas). And Nordstrom Inc. JWN, +1.75% has been building out urban locations, like its Local shops and new Manhattan men’s store, that offer a personalized touch for shoppers with fast-paced city lives.
Tractor Supply, on the other hand, positions its stores in towns just outside of major metropolitan areas with populations of about 20,000 to 40,000 people, or in rural locations.
“The main thing is we have an authentic customer who has a love of the land, community, family and animals,” Pilkington said.
The range of products available for this customer goes into unexpected areas of the country lifestyle, including farm animal toys, like those showcased by the company Schleich at the recent Toy Fair in New York City. Storage tanks and fencing, chain saws, and pressure washers are some of the items you can expect as well.
And if chicks aren’t your thing, they also have bees and everything you need to raise your own hive.
It’s a business that’s on a growth trajectory, according to Wells Fargo analysts, who met with Tractor Supply executives recently. Analysts highlighted the Neighbors Club rewards program, which grew to 11 million members in fiscal 2018 and accounts for about half of sales; the buy-online-pickup-in-store service, with 70% of online orders picked up at a bricks-and-mortar location; and the growing use of mobile checkout, which will be in 1,000 stores by the end of the year.
Tractor Supply had 1,765 stores as of Dec. 29, 2018. It also owns and operates Petsense, a pet supply chain, which had 175 locations as of Dec. 29, 2018.
“[W]e remain bullish on FY19, with an achievable near-term outlook, defensive characteristics (in a volatile market), relatively low tariff exposures and ample levers to drive multiple years of top-line margin improvement,” analysts led by Zachary Fadem wrote in the Feb. 14 note.
Wells Fargo rates Tractor Supply shares outperform with a $108 price target.
Tractor Supply shares have rallied 44.4% over the past year while the SPDR S&P Retail ETF XRT, +0.31% has shed 1.5% for the period and the S&P 500 index SPX, +0.12% has gained 1.8% over the last 12 months.
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