Five Below to Open 200 Stores in 2023

Citing “momentum” from its holiday sales, retail chain Five Below has announced the most aggressive expansion plan in its history, opening new stores in 200 locations this year.

The specialty discount chain, which aims for the “tween and teen” market, also said it plans to convert more than 400 of its stores to its new “Five Beyond” format, an in-store shop that features items priced about the company’s namesake $5 threshold, according to a report in Chain Store Age.

[The company initially wanted to call the higher-priced store Ten Below, but that sounded too chilly.]

Philadelphia-based Five Below ultimately is aiming to increase its US footprint from 1,300 stores—in 42 states—to up to 3,500 locations that have been designated as having “store potential.”

The company announced its latest expansion blueprint in a release detailing Five Below’s sales for the holiday season stretching from Oct. 30 to Jan.7.

Five Below said its sales rose 11.2% during this period, topping $1B for the first time; this compared with $902M in 2021, when the chain broke even. Five Below expects its net sales to come in (its fiscal year ends Jan. 28) above $3B for 2022.

Discount retail chains have been a hot growth sector in the past year.

Dollar stores, boosted by demand for less expensive groceries and goods of all types in underserved rural as well as urban areas, outpaced other retailers in new store openings, according to a report last month in the Wall Street Journal.

By the end of the month—once again, the fiscal year that ends at the end of January, which appears to be the FY of choice for discount chains—Dollar General and Dollar Tree—combined in 2022 to open more than 1,300 new stores.

Discount chain TJX also opened 100 new stress in 2022.

The expansion of dollar stores has been turbocharged by their ability to do well in sparsely populated areas of the country, bringing the economies of scale of a national chain with national buying power to locations that have a lower cost of labor and operations that urban and suburban areas, the WSJ report said.

Dollar General now has more than 18,800 stores in the US, compared to the original 5,000 in 2001, according to Coresight Research. Dollar Tree, which acquired Family Dollar Stores in 2015, has more than 16,000 stores in the US.