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How Tractor Supply Is Growing Through the COVID-19 Crisis

By Howard Smith – Aug 7, 2020 at 1:10PM

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The rural lifestyle retailer became an essential business for many consumers during the pandemic.

Tractor Supply (TSCO 1.33%) has differentiated itself as a retailer by focusing on the needs of the rural population in the U.S. It specializes in providing customers supplies and service for what it calls "life out here," including assistance for pets and livestock. 

In 2019, sales increased by almost 6%, with online sales growing in the double digits. The company remained open as an essential retailer through the COVID-19 pandemic, and quickly implemented curbside pickup and same day/next day delivery. The results have been an astounding 35% year-over-year sales increase during the second quarter of 2020, including triple digit e-commerce growth.

Tractor Supply store front

Image source: Tractor Supply Company.

The company said growth came as the pandemic led many Americans to focus more on taking care of their homes, land, and animals. Tractor Supply president and CEO Hal Lawton said the company is acting on new growth initiatives to "advance our efforts to remain nationally strong while locally relevant."

New initiatives include the creation of a field activity support team (FAST) to improve merchandising activity in the stores. The company said it successfully improved the productivity of receiving and stocking merchandise last year, and now wants to build on that. It also said it has identified new technology and service enhancements it is working on. 

Tractor Supply created a niche for itself over the years as the premier rural supply store. Its culture always included hiring knowledgeable store personnel, many of whom come from farming and rural backgrounds. Now the company is taking that niche more mainstream and should continue to capitalize on the success it has experienced throughout the pandemic-affected first half of 2020. 

Howard Smith has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Tractor Supply. The Motley Fool has a disclosure policy.

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