• by Sarah Mahoney , Staff Writer @mahoney_sarah, August 9, 2023

The annual ranking of the 25 fastest-growing retailers shows that for stores in this harsh climate, tepid is the new hot.

And while there are some amazing growth stories in the National Retail Federation’s list, including Primark, 7-Eleven and Costco, the rankings reveal how stores are struggling to hit their post-pandemic stride. In the 2022 list, all 25 retailers posted annual sales growth above 25%. This year, six achieved that level of growth.

The pandemic “was the best and worst for all retail,” said David Marcotte, senior vice president at Kanter, which compiled the ranking for the NRF, in its announcement.

“Now that we’re largely past the pandemic, signs of stress are starting to show. For many retailers — particularly in segments like grocery — it has shown up through mergers and acquisitions,” Marcotte added.

That includes the No. 1, Chedraui USA, and No. 2, Raley’s Supermarkets. The former, a Mexican grocer, grew 137% when it acquired Smart & Final stores. And Raley’s, with 100 grocery stores mainly in northern California and Nevada, moved into Arizona, New Mexico and four Tribal Nations in a merger with Bashas’ Family of Stores. That gave them a growth rate of 74%. And Superior Grocers (No. 6) added Numero Uno, a chain of Hispanic supermarkets.

The third fastest-growing is Primark, the Irish giant that has been expanding rapidly in the U.S., with sales growth of 66%. Schwarz Group, the parent company of Lidl, comes next, followed by 7-Eleven, propelled by the acquisition of Speedway.

The list is peppered with plenty of other food chains, showing how quickly the grocery landscape is changing. That includes B.J.’s Wholesale Club (No. 7), Costco (No. 12), Publix (No. 18) and H.E. Butt Grocery (No. 25.) And if you toss in the two wine retailers, Total Wine & More (No. 16) and Wine.com (No. 17), half of the Hot 25 are in the food and wine categories.

“If you look at the growth in grocery, it’s almost all M&A,” Marcotte says in the report. “That both shows the strength of the sector and some of the stress.”

But specialty retailers also make an impressive showing, including Inditex (No. 8), Chico’s (No. 9), Ulta (No. 10), Sephora (No. 14), Tiffany (No. 16) and Lululemon (No. 24).

Marcotte notes that some growth comes from retail media networks, at least for those with the capital to invest in the required technology.