CINCINNATI - A fast growing discount retailer that caters to teens, preteens and their parents has identified Cincinnati as one of its newest expansion markets, the latest in a string of bargain-basement merchandisers to sense opportunity among Cincinnati consumers.
Philadelphia-based Five Below Inc. opened three stores in the region last year and is scouting additional sites now as part of a 100-store expansion planned in 2017. The company – which offers clothing, sporting goods, crafts and beauty supplies at prices ranging from $1 to $5 – hopes to eventually quadruple in size to 2,000 stores nationwide.
“We are particularly pleased with our performance so far in Cincinnati, and we feel real opportunity exists to expand our brand awareness,” said Zach Minteer, vice president of real estate for Five Below. “That’s why we’ll be planning to open additional stores in the next year and beyond.”
The company wouldn’t say how many stores are planned in Cincinnati. It currently operates at Sycamore Plaza in Kenwood, Bridgewater Falls in Hamilton and 32 East Shopping Center in Clermont County. It also operates four stores in Dayton, two in Louisville and one each in Columbus and Lexington.
Founded by two former executives from the educational superstore Zany Brainy, Five Below is known for its colorful stores averaging 7,500 square feet and typically found in strip malls.
Discount retailers have been one of the few bright spots in an industry known lately for store closures and downsizing. As retail banners like Macy’s, Sears and Whole Foods struggle to compete against online rivals, off-price retailers like T.J. Maxx, Ross Stores, Dollar General and Aldi’s supermarkets are rapidly growing.
Macy’s Chief Financial Officer Karen Hoguet told Wall Street analysts last month that discount retailers are a bigger threat than online rivals like Amazon.com.
“We spend a lot of time trying to make our experience better vis-à-vis the off-price retailers, because I think that's been the bigger competitive threat for us over time,” she said.
At least one retail broker suggests the shopping experience might actually be a competitive advantage for discounters.
“There’s still a lot of fascination in that treasure hunt side of the shopping experience,” said Andrew Feinblatt, a principal at On Site Retail Group. Its clients include Aldi, Marshalls, Dollar Tree and GameStop.
Feinblatt said consumers are looking for more entertainment when they visit retail centers. That’s driving growth in the restaurant industry, fitness centers, swim schools and off-price retail. Stores that focus on overstock merchandise or goods returned to higher-priced retail stores can cultivate loyal shoppers that love to hunt for bargains.
“I’m not a huge fan of the word discount,” he said. “I would actually use the word entertainment.”