In this Placer Bytes, we dive into the impressive rebound of Trader Joe’s, the potential for American Dream’s reopening, and Home Depot’s two-month-long Black Friday.
Trader Joe’s Coming Back
In March, we noted the unique struggles that Trader Joe’s would likely face during COVID. The brand’s pricing, lack of online orientation, and perception as ‘part’ of the grocery picture as opposed to a one-stop-shop, were factors that we felt would limit success. And this proved to be true early on in the crisis when year-over-year declines were some of the industry’s largest and continued even as recoveries were underway.
But, the brand deserves a huge tip of the cap at the moment. In August, Trader Joe’s marked its first month of year-over-year visit growth since February. And amazingly, it’s done so while other brands who’ve struggled - like Whole Foods - remain down. While the wide geographic distribution may be helping, the progress goes a very long way in building a model for how different types of brands can drive recoveries even while facing significant obstacles.
American Dream-ing
The American Dream mall is reopening on October 1st, and while there is still plenty of reason for skepticism, there are also reasons to believe the reopening could succeed. Prior to the pandemic, visits to the American Dream were picking up steam, with the week of February 17th driving it’s 2020 peak, and the most visits apart from the December holiday season in 2019. And now, retail will finally be a part of the package.
This could be a big deal. Looking at nearby New Jersey rival, Westfield Garden State Plaza, the mall saw a 7.4% increase in overall visits the last four weeks compared to the four prior, so demand for malls in the region is increasing. The American Dream’s unique size and combination of offerings may just provide a needed boost to this long-awaited project.
Two Months of Home Depot Black Friday
When we broke down the true importance of Black Friday and Thanksgiving weekend to retail, we noted that brands should be expected to extend the holiday season. And Home Depot proved that concept true by announcing that they would be running Black Friday deals throughout the coming months. Why does this matter?
Firstly, it’s a trend that many other retailers are going to replicate. Secondly, it’s important for Home Depot who rode an exceptionally strong Q4 to great success in 2019. In fact, visits for November and December were up 7.4% in 2019 when compared to the same months in 2018 - a boost that rival Lowe’s did not see.
Finally, it matters because Home Depot is looking for ways to extend its uniquely successful run of late. The weeks beginning August 24th and 31st saw visits that were up 11.0% and 10.1% year over year. While these are still exceptional numbers, they mark a ‘fall’ from year-over-year growth rates of 20% and more in the weeks and months that preceded it. Obviously, this is more a statement to the incredible heights that Home Depot hit since the spring, but it also speaks to a brand pushing to extend its ‘lightning in a bottle moment’. And this is important because it cements a growing strength for Home Depot of pushing to more strategically own the calendar - something that we first discussed regarding the 2019 holiday season. Should the brand prove capable of doing so, its strength could last far longer than even the most optimistic expectations.
Will Trader Joe’s continue to rebound? Can American Dream re-open to retail strength? Will Home Depot’s holiday strategy drive success? Visit Placer.ai to find out.
