There's an old adage that discount stores typically lead coming out of a recession. Meaning, this sector will show healthy signs before most other businesses. It's held true in the past, and I keep seeing indications that retailers are indeed readying for a rally.
Target is opening a bunch of stores on Sunday, 26 total (although most are open already, Sunday is the official grand opening). There will be 21 general merchandise, or regular discount stores. Eighteen of these stores will have expanded grocery departments including fresh foods. Five new SuperTarget stores will open as well.
But Target opening stores isn't really an indicator of economic recovery. Target always opens stores in October. The company sticks to a regimented new store schedule, opening locations in March, July and October like clockwork. The only thing unusual about these Target store openings, is that there are fewer than originally planned.
Last year, Target announced it was scaling back new store openings in 2009 and 2010. Instead, management was focused on improving sales at existing stores with things like expanded grocery departments and emphasizing value-priced items.
But while I find no sign of economic recovery in Target's news, I do see promise in the news that Fred's has opened a new prototype. Fred's is a regional discount chain based in Memphis with stores in 15 states. There aren't many regional chains left and news that Fred's is still in business, let alone expanding and experimenting, warms my heart.
Retailers open prototypes to try out new store designs, merchandising programs and systems. Fred's latest in Bartlett, Tenn., has a new logo and updated look. There's a larger food department, rearranged check-out and entrance, and a pharmacy up front rather than in the back (a real customer friendly move, since pharmacy placement in the rear is supposed to get people to buy more as they walk the store).
According to the Memphis Business Journal, Fred's plans to open another prototype in Tupelo, Miss. later this year, and 25-30 additional stores. That would bring Fred's total store count up to nearly 700. Not nearly as many as Target, but certainly more meaningful.
Target and Fred's open new stores. Is the recession over yet?