Retailers Buck E-commerce Trend, Drive Growth Through Physical Stores

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4.22.2026

Quick Facts

Physical retail represents 79.5% of worldwide retail sales totaling $24.9 trillion in 2025
TJX Companies stock gained 32% in one year by focusing on treasure-hunt shopping experiences
Trader Joe’s grew from $133 million to $20 billion revenue since 1988 without major e-commerce investment

Major retailers are posting strong growth by deliberately avoiding heavy investment in e-commerce and focusing instead on physical store experiences.

Costco maintains its membership-driven model with plans to open 30 new warehouses annually. CFO Richard Galanti said the company wants customers to visit stores because “you’re going to buy more stuff when you come in.” While Costco has e-commerce operations showing 20.7% growth, the company prioritizes its in-store treasure hunt experience.

Trader Joe’s expanded aggressively with plans to add 21 new locations across 13 states in 2025. The company opened 34 stores in 2024 and operates more than 600 U.S. locations. From 1988 to 2024, Trader Joe’s revenue grew from $133 million to over $20 billion, reflecting 15% compound annual growth. The company has zero plans to pursue in-store retail media, according to recent podcast statements.

Off-price retailers are thriving with the treasure hunt model. TJX Companies, which operates TJ Maxx and Marshall’s, posted 32% stock growth over one year and 176% over five years. The company turned excess inventory into a profit engine by offering constantly changing assortments that create purchase urgency.

Dollar stores also posted strong traffic gains. Dollar General, Dollar Tree, and Five Below grew year-over-year traffic by 5.1%, 5.2%, and 12.8% respectively in 2024. Dollar General COO Jeff Owen described their Popshelf concept as a “fun, affordable and differentiated treasure hunt experience.”

Ross Stores delivered 12% year-over-year revenue growth to $6.6 billion in Q4 2025 while maintaining limited e-commerce presence to minimize shipping and return costs.

The treasure hunt model works by offering limited quantities of varied merchandise. Customers are conditioned to buy immediately knowing items may not return. Neil Saunders from GlobalData said this approach is “much harder to replicate online, as it is nowhere near as easy to browse through loads of products and pick out interesting things.”

Cost considerations drive the strategy. Accenture’s Global Head of Retail noted that shifting from 15% to 50% online sales creates unplanned costs that damage profitability. Online delivery particularly hurts margins on low-price goods.

Despite e-commerce growth to 16.4% of total sales in 2025, brick-and-mortar shopping dominates. Industry research shows 78% of retailers consider in-store experiences key to future success, while 83% of consumers report positive physical shopping experiences.