Tractor Supply is in growth mode; More stores may come to New Jersey

 By Mateusz Wnek CoStar Analytics

Tractor Supply, a chain that bills itself as the country's largest rural lifestyle retailer, updated investors in December on its long-term outlook, which includes aggressively expanding its brick-and-mortar footprint.

Central to its expansion plans has been the company’s sale-leaseback strategy. Launched in 2023, the strategy calls for the company to sell and lease back its 117 existing legacy retail locations at a pace of around 15 stores over the next seven to 10 years.

Accordingly, proceeds from the sales will fund the company's new store growth, starting with 90 new stores in 2025. The latest count shows the company operating more than 2,200 stores in 49 states, including 31 in New Jersey.

The Garden State is an attractive destination due to its population density, above-average household incomes and expansive highway network. Over the years, Tractor Supply has targeted the state's suburban and rural areas, particularly its farming communities in the rural Northwest and South Jersey.

CoStar recently explored the company’s existing footprint, proximity to its biggest competitors and availability of suitable retail space to surmise where it could hypothetically open new stores as part of its national expansion strategy.

To do this, a simple optimization model was run to maximize the number of potential store openings given a defined set of competitive, demographic and geographic constraints. Using CoStar’s dataset of current available retail space in New Jersey as a starting point, the constraints included:

• Minimum of six miles from an existing Tractor Supply location
• Minimum of 0.3 miles from the nearest competitor (Home Depot or Lowe’s)
• Available retail space between 15,000 square feet and 25,000 square feet
• Available retail space is located in a city with at least 3% population growth since 2020

Additionally, given the company’s product line and typical customer profile, urban cores like Bergen, Essex, Hudson, and Union counties were excluded from the analysis.

Given these constraints, the model produced six options spread across Burlington, Camden, and Ocean counties. Each location is in a high-population-growth area with sufficient distance buffers to existing Tractor Supply locations and its main competitors. 

An example is Plaza at Cherry Hill, a community center on Route 38 with over 23,000 square feet available. The property is 88% occupied by various tenants, including Raymour & Flanigan, LA Fitness and Aldi, and it benefits from Cherry Hill’s 4.5% population growth since 2020.

While this was merely a desktop exercise, it nonetheless identified potentially underserved communities that, on the surface, could support another Tractor Supply location. Management may provide updates on its real estate strategy during the company's quarterly earnings call at 10 a.m.

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