Audio Sources - Full Text Articles

Amazon, Target, and Walmart will be the biggest winners from Bed Bath & Beyond’s demise

A bin of outdated signage at a Bed Bath & Beyond store

Dominick Reuter/Insider

  • Bed Bath & Beyond has filed for bankruptcy and is conducting an “orderly wind down” of its stores.
  • The demise of the housewares giant opens up billions of dollars of new sales for other retailers.
  • Amazon and Target are slated to gain the most, but smaller companies are angling to get a share too.

Bed Bath & Beyond’s major competitors – including Amazon, Target, and Walmart – stand to gain hundreds of millions of dollars, if not billions, in additional sales as the bankrupt retailer winds down.

The housewares giant plans to close its doors for the last time on June 30, at which point its market share will largely have been picked up by larger retailers who have already been nibbling away at the beleaguered company’s sales.

Shopper Brandon McDonald told Insider he was a 20-year patron of his local Bed Bath & Beyond location in Wisconsin, where over the years he relied on the store for things like his wedding registry and outfitting a newly purchased home.

Insider visited the store last week as liquidation sales were beginning. McDonald was one of three shoppers at that location who said they would find what they needed on Amazon — or just go to the Target right next door.

Those shoppers’ plans are aligned with new data from retail analytics firm Numerator, which found that more than two-thirds of Bed Bath & Beyond shoppers would shift their spend to Amazon, followed by Target, Walmart, and HomeGoods, a sibling company to T.J. Maxx.

“The likely winners are Target, HomeGoods, some T.J. Maxx stores, Walmart, and Amazon,” GlobalData Managing Director Neil Saunders said in a note shared with Insider, adding that the remainder of the market share will likely be spread out across many smaller companies.

Sixty-eight percent of shoppers in the Numerator survey named Amazon as the place where they would most likely shop for products that they currently get at Bed Bath & Beyond.

Target was the second most popular destination overall, but it landed at No. 1 in several of the categories that Bed Bath & Beyond is best known for: kitchen and bathroom supplies, decor, storage, and bedding.

Consumers will have fewer options with the demise of Bed Bath & Beyond, said Peter Greene, Numerator’s Insights Practice Director for General Merchandise, in a statement. But he added that retailers have a new opportunity to win new customers by “filling the void” with an improved product mix and assortment.

Of course, the void has been years in the making.

“Bed Bath & Beyond was slow to embrace and adopt the e-commerce boom, which was pioneered, advanced, and utilized to great success by direct competitors like Target, Walmart, and Amazon,” Bed Bath & Beyond CFO Holly Etlin wrote in bankruptcy filings.

Etlin also pointed to the company’s abandonment of recognized national brands in favor of its own Target-style private label portfolio “that customers did not want.” Pandemic-era supply chain difficulties proved to be another nail in the coffin as well.

“While many ideas, such as the introduction of private labels and scaling back discount coupons, seemed sensible on paper, they were poorly executed and out of alignment with what shoppers wanted,” GlobalData’s Saunders said. “Tumbling sales resulted, exacerbated by a tightening economy.”

Bed Bath & Beyond’s sales plummeted from $11.1 billion in 2019 to an estimated $5.4 billion in 2022.  At the same time, revenues were rising every year at Amazon and Target.

Preliminary figures indicate Bed Bath & Beyond’s net sales were roughly $1.2 billion during its fourth quarter, which includes the holidays, down by as much as half from the same period the year before.

As the titans of retail take an ever larger share of Bed Bath & Beyond’s former customers’ spending, several smaller brands aren’t sitting on their heels: Specialty brands like The Container Store, Big Lots, and JoAnn Fabric are already seeking to woo shoppers by accepting the company’s famous – and now defunct – big blue coupons.

Read the original article on Business Insider
WP Radio
WP Radio