Accelerating previously planned technology investments, Tractor Supply has launched its first mobile app and a redesigned e-Commerce site in order to meet the needs of customers relying more on digital devices since the beginning of the pandemic. As an essential retailer during the COVID-19 shutdowns, Tractor Supply also has seen a sales surge in its stores.
Buoyed by its projection of record-setting sales and same-store sales growth in Q2, the retailer announced on May 26 that it will permanently raise compensation for frontline team members, add new benefits for part-time workers and extend the $2 per hour “appreciation bonuses” for hourly store workers through June 27. The bonuses had previously been extended from their original end date of April 25 to May 9.
“The investments we are making in our team members and new technology and services are done with a commitment to disciplined financial returns and profitable growth, as we look for these strategic investments to be offset over time by increased sales, improved gross margin opportunities and cost savings in other areas,” said Hal Lawton, President and CEO of Tractor Supply in a statement.
With more than 70% of Tractor Supply’s e-Commerce traffic already coming from mobile devices, the retailer has been late in introducing its first mobile app. However, Tractor Supply is deploying technology that will allow it to iterate and bring new capabilities and features to market quickly. The app has been developed using an open-source application format that supports a common code base across the Google Android and Apple iOS mobile operating systems.
The relaunched e-Commerce site also has been developed to help enable rapid growth, with a web architecture that leverages open-source, cloud-based technologies.
Pay And Benefits Increased For Permanent And Temp Workers
In addition to the extension of the COVID-19-related pay increase, recent enhancements to team member compensation and benefits include:
- Permanent wage increases for team members at approximately 2,100 Tractor Supply and Petsense stores and eight distribution centers, effective June 28;
- A new benefits package for part-time team members that includes medical, vision and dental coverage, as well as paid sick time and life insurance; and
- The issue of annual restricted stock units to more than 2,000 salaried managers at stores and distribution centers.
Tractor Supply Presents Sunny Q2 Outlook
On April 7, Tractor Supply withdrew its guidance for fiscal 2020, citing the uncertainty related to the pandemic — a step many other retailers have taken. Yet with three weeks still left in its fiscal Q2, which ends June 27, the company announced an updated, and quite positive, financial outlook.
Tractor Supply is now forecasting record-breaking 24% to 29% growth in net sales and comparable-store sales increases of 20% to 25%. The retailer also expects to report gross margin expansion for the quarter.
In its first quarter, Tractor Supply reported a 7.5% net sales increase and a 4.3% increase in comp-store sales. The company reported a gross margin of 33.8% in Q1, approximately the same as the prior year’s first quarter.
“Our outlook for record-breaking sales and earnings in the second quarter demonstrates the potential for Tractor Supply to emerge stronger than before as we continue to gain market share and build our business for the future,” said Lawton.
Tractor Supply is scheduled to release its Q2 2020 earnings on July 23.