Discount Retailers Drive Tenant Expansion
Consumers’ quest for lower prices has helped drive discount retailers into expansion mode in 2025, according to Northmarq’s top 100 tenant expansion trends report for the first quarter of 2025.
Familiar brands are being aggressive on store openings and innovative concepts to meet shifting consumer needs and preferences.
“Discount retailers are capitalizing on a perfect storm of economic conditions and shifting consumer priorities,” report author Lanie Beck, Northmarq senior director of content & marketing research, told Commercial Property Executive.
“With inflation tightening budgets, shoppers are increasingly seeking out affordability and value-driven options, and these retailers are meeting that demand head-on with aggressive expansion plans.”
From Burlington’s smaller formats to Five Below’s hybrid pricing strategies, Beck said each player finds innovative ways to grow while maintaining their value proposition.
“ALDI, Dollar General and Ollie’s are especially focused on underserved markets, ensuring every community has access to budget-friendly essentials,” she said. “This growth trend highlights the resiliency of the discount retail sector and reflects the evolving dynamics of how and where consumers choose to spend their money in 2025.”
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Northmarq pegged these expansions: TJX Companies (opening 70 new locations in 2025); Five Below (adding 150 new stores in 2025, expanding its “Five Beyond” concept for higher-priced items); Burlington (planning 100 net new stores in 2025 with a focus on smaller formats and key markets); Ross (80 locations); Ollie’s Bargain Outlet (75 stores); Walmart (opening or converting 150 stores over five years); ALDI (targeting 225 new stores in 2025, with a focus on rural/suburban markets); Dollar General (opening 595 stores, prioritizing underserved rural areas).
Ollie‘s Bargain Outlet is opportunistic, capturing dozens of shuttered Big Lots stores, according to Rick Scardino, principal at Lee & Associates in Illinois. Dollar General and Five Below are also in an aggressive expansion mode. Aldi is not slowing down in the grocery sector, following a revamp of its interiors and a continued mix of high-quality food offerings.
“They’ve created a highly loyal base of shoppers in the process,” Scardino said. “Finally, to the surprise of many insiders, Burlington has ambitious expansion plans in the works.”
Reshaping the retail landscape
The growth of discount retailers has been a significant trend since the 2008 financial crisis, Naveen Jaggi, president of retail advisory services at JLL, told CPE.
“It has reshaped the retail landscape,” he said. “Before 2008, discount retailers were hard to find within a 5-mile radius, but now they’re commonplace, reflecting a lasting change in how consumers shop.”
Jaggi expects discount retailers to continue expanding, strategically positioning themselves closer to their customer base. “This trend will likely endure as U.S. consumers persistently seek ways to stretch their dollars further, especially during economic challenges.”
There is a modest but notable uptick in investor interest and search activity for discount retail assets on Crexi, particularly single-tenant Dollar General stores, Eli Randel, Crexi COO, told CPE.
“While the overall volume of searches hasn’t spiked dramatically, the consistency and specificity of investor targeting in this segment suggests growing recognition of its resilience,” Randel said.
These retailers benefit from steady foot traffic in rural and suburban markets, especially as more consumers trade down from traditional grocers and big-box stores, he added. Given the current uncertainty around consumer discretionary spending, properties leased to discount brands are increasingly viewed as defensive plays within retail.
“For investors focused on income stability, net-leased assets in this category offer a compelling hedge against economic volatility without the operational complexity of other retail types.”
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