Amid soaring inflation, many consumers have been turning to lower-price retailers—including discount grocers, big-box stores, and dollar stores—to shop for essential items without breaking the bank. Ollie’s Bargain Outlet (NASDAQ: OLLI), a discount closeout retailer that sells a range of products such as food, clothing, electronics, automotive, and home goods, has reportedly seen similar increases in consumer demand. In fact, consumer transaction data shows that Ollie’s Bargain Outlet’s sales growth in early 2023 outperformed several big-box retailers and other discount competitors, such as Dollar General (NYSE: DG), Dollar Tree Inc (NYSE: DLTR), and Big Lots (NYSE: BIG). Furthermore, Ollie’s year-over-year customer growth has outpaced its growth in monthly sales per customer since the second half of 2022.
Sales growth at Ollie’s Bargain Outlet (NASDAQ: OLLI) in early 2023 was higher than several big-box stores and other discount competitors
Looking at the first two months of 2023, Ollie’s Bargain Outlet’s combined sales in January and February of 2023 increased 23 percent since the comparable period in 2022. In the same time frame, sales increased 20 percent at Five Below (NASDAQ: FIVE), and 13 percent both at Dollar Tree Inc (which includes Dollar Tree and Family Dollar) and Dollar General.
Store openings are a likely factor in sales growth for several of these companies. For example, Dollar General opened more than 1,000 stores in the 2022 fiscal year, while competitor Dollar Tree Inc opened about 500 stores. Ollie’s opened 37 new stores in 2022, and plans to increase its footprint to more than 1,000 stores over time. Unlike the rest of the competitors in this analysis, Ollie’s does not sell online. Ollie’s network of brick-and-mortar stores mostly procures products from overstocked or unsold merchandise from other retailers.
Compared to the discount stores, big-box retailers Walmart Inc (NYSE: WMT) and Target Corporation (NYSE: TGT) saw lower year-over-year increases in the first two months of 2023, at 11 percent and 1 percent, respectively. The discount closeout retailer Big Lots—which primarily sells furniture and home decor—was the only company in our analysis that experienced declining sales, with a year-over-year decrease of 13 percent for January and February of 2023. Notably, Big Lots experienced furniture shortages after its largest supplier closed in November 2022.
Ollie’s customer growth outpaced growth in per-customer spending since mid-2022
A closer look at the data reveals that Ollie’s year-over-year customer growth outpaced its growth in monthly sales per customer in the second half of 2022 and early 2023, indicating that higher customer volume likely had a greater impact on sales growth than changes in per-customer spending at the discount closeout retailer. Transaction data shows that Ollie’s year-over-year growth rates were higher for sales per customer for the first five months of 2022, but higher for customer counts for every month thereafter.
Despite rising inflation, the monthly average sales per customer at Ollie’s did not always increase year-over-year in 2022 and early 2023. Over the past 14 months, there were five months in which average sales per customer declined year-over-year. Meanwhile, the highest growth rate in this time frame occurred in July 2022, when average sales per customer increased 7 percent year-over-year—slightly under the inflation rate that month.
In February 2023, Ollie’s average sales per customer remained relatively consistent compared to the same month in the previous year. By contrast, Ollie’s saw double-digit growth in customer counts for every month since July 2022. In February 2023, Ollie’s growth in customer counts was 24 percent year-over-year.
While store expansion is a potential factor in customer growth, transaction data shows that most monthly sales originate from returning customers. In February 2023, 87 percent of Ollie’s Bargain Outlet sales came from returning customers (roughly the same as in February 2022). Ollie’s is also known for its strong loyalty program, Ollie’s Army, which offers special promotions for members and encourages repeat purchases.
Bloomberg Second Measure launched a new and exclusive transaction dataset in July 2022. Our data continues to be broadly representative of U.S. consumers. As a result of this panel change, however, we recommend using only the latest post in assessing metrics, and do not support referring to historical blog posts to infer period-over-period comparisons.