While third-quarter earnings delivered mixed signals across discretionary retail, one segment showed notable consistency: value-oriented big-box retailers.
Despite ongoing debate around consumer health, scattered store closures and softer discretionary spending, discount operators continue to grow. Many are refreshing stores, expanding footprints and pushing deeper into grocery and essential categories—territory once dominated by traditional supermarkets.
This shift reflects a broader “K-shaped economy,” where value retail is increasingly defining what qualifies as essential heading into 2026.
Value Big-Box Growth Is Accelerating
Some of the strongest signals came from the largest players. Costco plans to open 35 new warehouses in fiscal 2026, marking one of its most aggressive expansion years in the past decade. CEO Ron Vachris emphasized continued opportunity across existing markets. Walmart, meanwhile, is leaning into its logistics and e-commerce advantages, with plans to build or convert more than 150 U.S. locations over the next five years.
Perhaps the biggest surprise this earnings cycle was TJX Companies, parent of TJ Maxx, Marshalls and HomeGoods. Rather than pulling back, the retailer is planning roughly 130 new stores in the next year and has long-term ambitions to open more than 1,300 locations globally. The move signals strong confidence in brick-and-mortar retail and sustained demand for off-price formats. Even Target, despite recent stock pressure, continues to selectively expand—particularly through smaller-format stores in high-growth markets.
Other value-focused retailers with active growth plans include Ollie’s Bargain Outlet, Ross Dress for Less, DD’s Discounts and Dollar General.
Grocery Anchors Face a More Complex Reality
Grocery-anchored centers have long been viewed as the most stable retail asset class, but recent earnings commentary suggests that stability is no longer uniform. Kroger announced plans to close approximately 60 older stores, citing aging locations, demographic shifts and overlapping trade areas. Albertsons also disclosed closures of roughly 30 underperforming stores, with fewer new openings to replace them.
While demand for groceries remains strong, competition has intensified. Walmart, Target and Costco continue to capture a growing share of grocery, consumables and everyday essentials. Discount-driven operators are no longer just winning on general merchandise—they are making meaningful gains in grocery, historically the foundation of essential retail.
Key Takeaways for CRE Investors and Owners
Several themes are emerging from this earnings season:
- Discount big-box retailers remain the most dependable tenant category in retail.
- Grocery-anchored centers must now be evaluated by brand and location, not assumed to be universally stable.
- Prime big-box sites will face increasing competition, especially in fast-growing markets.
- Value retailers are well positioned to backfill struggling big-box spaces, accelerating the shift toward essentials-focused centers.
- The line between discount and grocery continues to blur, as formats like DG Market and Aldi reinforce this convergence.
The most important takeaway from Q3 earnings isn’t simply the state of the consumer—it’s the momentum behind value-based big-box retail. These retailers are expanding, capturing grocery spend and reshaping the definition of essential retail. Looking ahead to 2026, the companies opening the most stores, generating the most traffic and pursuing the most real estate are overwhelmingly value-driven.
Source: GlobeSt.