Tractor Supply is a Big Hit With Millennial Customers
Many millennials are leaving crowded cities for more suburban and rural lifestyles, and the trend is great for Tractor Supply's business, CNBC reported. Tractor Supply CEO Hal Lawton told CNBC on Monday that the farming supplies retailer has been gaining market share with its core customer, but also with new millennial customers as they settle into more rural communities.
Recently, Generation Y (people ranging in age from 25 to 40) has surfaced as a large portion of first-time homebuyers after facing barriers in the housing market for years. According to Lawton, this shift has led to a higher demand for pet, gardening and poultry products, and Tractor Supply saw a four point sales penetration change last quarter with millennials.
For the first quarter of 2021, Tractor Supply, which is valued at $22 billion, saw same-store sales increase 39 percent, CNBC reported. This surge helped produce $2.79 billion in revenue, and sales were up 53 percent from before the pandemic. Lawton believes the retailer's increase in millennial customers is a structural, and hopefully longstanding, trend that's driving the business.
Total Retail's Take: The COVID-19 pandemic accelerated the millennial migration from cities to suburban and rural areas, and it's plausible that these customers are spending more money on home improvement, lawn and garden maintenance, and pet care items. It will be interesting to see if this trend is here for the long term, as Lawton suggested, or if it starts to fade as the pandemic ends. Another concept to consider is if Tractor Supply will lean into its new millennial customer base and create more strategic initiatives to cater to those consumers. For example, increasing e-commerce and omnichannel services designed to better serve a digital-savvy audience. Regardless, Tractor Supply is certainly a success story that other retailers can look to for inspiration.
Ashley Chiaradio is the Senior Content Strategist at Total Retail. Ashley has been creating content for more than 7 years, and provides a unique insight in covering the retail industry having worked directly for retailers in the past. She’s passionate about profiling women leadership in the space.