CSG Industry Experts:

Natasha Perry

Apparel & Department

Rebecca Ewing

Grocery & C-store

Arthur Rosenberg

Home, Hardware, & Discount

Loren McCollom


Brian List

Drug, & HBC


Our panel of Industry Experts and authors of CSG Through The Ages, brings you this year’s series: Recession Busters

Businesses need vision, strategy, and the right leadership to find success even in a tough economy.

Using the vast CSG database of historical data and inside knowledge of each industry, our expert panelists have followed the trends for the last decade and selected the Top 10 companies in each segment that survived the recession.

Each month we reveal a top company that weathered the storm. We will examine what they did, how they did it, and where they are going in the future.

Apparel & Department Store Retailers


Ascena Retail Group, Inc. is a leading specialty apparel retailer for women, and tween girls and boys. The company operates through a family of subsidiary brands: Dressbarn, Maurices, Justice, Lane Bryant, and Catherines (the two latter making up Charming Shoppes). Including all trade names, Ascena Retail Group operates 3,900 stores throughout the United States, Puerto Rico and Canada. The stores offer private-label apparel, accessories, footwear, intimates, and lifestyle products.

The group of top retailers has a long line of history, going back over 50 years. In 1962, a mother of three opened the first Dressbarn store in Stamford, CT. At the time women were largely underrepresented in the workplace, and career wear for women was new to the market. By 2005 the company had close to 800 locations and acquired another 480 buying the Maurices brand. Maurices stores offer casual, career and dressy women’s apparel in sizes 1-24.

In 2009, Dressbarn expanded into the girls’ clothing market by purchasing Tween Brands, the owner of the Justice chain of 891 stores. Tween Brands is the largest tween specialty retailer in the world. Stores operate under the Justice & Brothers names and provide the hottest fashion merchandise and accessories for tween (age 5-14) girls and boys. The company started in 1987 as Limited Too Inc. and by 2009 had converted all stores to its lower-priced, faster-growing Justice name.  Brothers, the brand for boys, was launched in 2011 and continues to thrive.

In January 2011, to reflect its broader reach, the company was reorganized and named Ascena Retail Group, Inc.  In May 2012, the company announced another acquisition. Charming Shoppes would join the growing group or retailers. Charming Shoppes is a specialty and plus-size clothing company based in Bensalem, PA. Its trade names currently include Lane Bryant, Cacique and Catherines Plus. (At the time of the acquisition the company announced it would close all of its Fashion Bug stores.)

Ascena Retail Group Inc.’s annual sales grew 232% from 2007 to 2014. For the same time period store count grew 155%. Busting through the recession is easier when you are already a winner. Dressbarn broke into the industry as an innovator and built a brand that has lasted over half a century. Tween Brands’ Justice stores still holds the top spot in its segment with at least 10 percent market share ahead of Wal-Mart Stores, Target and Kohl’s. Lane Bryant was the first women’s apparel retailer in America devoted exclusively to plus-sizes and has never teetered from its core values. In 2011, Maurices was rated one of the “Top Ten Best Employers in Retail” by Forbes.com. Keep an eye on Ascena Retail Group, as it continues to be an industry leader.




Discount, Dollar, & Hardware Retailers


Often the retail segment of the automotive aftermarket has been thought to be essentially recession-proof.  Most of these retailers focus on the do it yourselfer, save for testing and installing batteries and the occasional change of a windshield wiper or headlight.

While most of the top national chains operate as such, Pep Boys is an exception here as they offer a full line of maintenance and repair services, as well as tires.  Over the past decade, Pep Boys has ridden somewhat of a flattish, financial roller coaster.  Corporate annual sales continually fluctuated between around $2.24 billion and $1.91 billion.  The company’s financial posture painted a recessionary picture of a struggling retailer.  The Pep Boys, for all of its offerings, fought to survive the recession as AutoZone thrived.

AutoZone has led the Chain Store Guide Index of Leading Companies in the Automotive Aftermarket Retailers category for this entire century.  Well prior to the recession, AutoZone was methodically establishing a reputation for being the leader in retailing discounted auto parts.

The company achieved this station through uniquely focused advertising and corporate sponsorships, concentrating on men’s-interest media such as sports.  At the same time the company focused on rapid market expansions, including entry into Mexican retailing.  Exploding the corporate store and market count greatly enhanced the company’s ability to purchase product in ever larger quantities, at increasingly lower prices.  The company’s entrance into Mexico also allowed it to establish relations with the burgeoning number of Mexican parts producers.  These companies were rapidly expanding in order to serve the quickly growing number of new manufacturing facilities being opened by American and European manufacturers such as Ford, GM and Volkswagen.

As the recession approached, AutoZone had already invested considerably in bringing low-cost private label products to its supply chain while heavily promoting them.  The company pioneered in advertising these low-priced offerings as an essential part of preventative maintenance, in order to better maintain the life of the family car or a cherished, irreplaceable personal favorite.  Preventative maintenance, as enabling consumers to extend the life spans of their vehicles became a naturally strong appeal during the recession.

As the recession came into play, AutoZone was perfectly positioned to deliver on its heavily promoted low-cost offerings.  Actually AutoZone’s annual fortunes have fared better since the recession began than they did during the years leading up to the recession. During the summer of 2004, AutoZone reported its lowest increase in annual revenues for this century.  This increase was a modest 1.3 %.

AutoZone reported a 5.72% annual increase during the summer of 2008, followed by a rise of 4.51% as the recession hit full force.  During the following two years the company produced consecutive increases of 8.01% and 9.64% respectively.  AutoZone has never looked back.  AutoZone has not suffered a decrease in annual revenues throughout the current century.

AutoZone’s annual expansion of locations has been equally spectacular.  During the summer of 2007, AutoZone reported 4,056 locations.  The next year as the recession hit, that number grew to 4,272.  Then as most retailers were scurrying to cut back on real estate commitments, AutoZone netted an additional 145 locations followed by 210 stores added for fiscal 2010.  Here again, the company never experienced anything near a decline in its annual store count during the recession.  That store count currently approaches 5,400.



Drug Store & HBC Chains


Sally Beauty has experienced steady revenue growth throughout the past decade, with total sales increasing 37% since fiscal 2009. The retailer’s network of stores has increased to over 4,600 across North America and South America, as well as several European countries. The company operates in two distinct business segments – Sally Beauty Supply and BSG. Sally Beauty Supply’s network of 2,700 locations is the largest open-line distributor of beauty supplies in the U.S. Worldwide, there are over 3,400 Sally Beauty Supply stores worldwide. The stores have been successful throughout the recession because of their value and pricing, as well as an extensive assortment of both leading third-party professional and exclusive-label professional beauty products.

The other component of the Sally business, BSG segment has been a strong contributing factor to Sally’s success. BSG distributes professional beauty supplies to both retail consumers and salon professionals; it is the largest full-service distributor of beauty supplies in North America through a network of over 1,200 company operated stores and 161 franchised supplied stores. Although BSG accounts for a slightly smaller percentage of total revenue for the company (38% vs. 68% for Sally Beauty Stores) the business segment experienced 48% growth since fiscal 2009. Both segments have seemingly carved out a niche in the market that has helped Sally become a true recession buster.



Grocery & C-Store Chains


In 1883, a man named Barney invested his life savings, a total of $372, to open a little grocery store in Cincinnati, Ohio, with the business philosophy “Be particular. Never sell anything you wouldn’t want yourself.” That man was Barney Kroger and that small grocery store was The Kroger Company, which now makes over $98.4 billion a year. It wasn’t by chance the company came to be one of the largest retailers in the world or was able to thrive during the recession. Not only has the company made innovation its best friend, but it has also made market research and sustainability a top priority. Combine these concepts, with a list of mergers and acquisitions, and excellent leadership by CEO Rodney McMullen, and you will easily see how Kroger has become one of the nation’s top supermarkets. The company has been so successful that when researching its store and financial growth, it is clear that it not only thrived during the recession, but it was unfazed by any economic problems.

Innovation has become a hot topic in recent years and is a buzz word you will see in most business magazines and websites, but this recent hot topic it is nowhere near a new concept. Soon after opening his grocery store, Mr. Kroger realized that if he baked his own bread he could sell it for less and still make money. This led Kroger to become the first grocery store to have an in store bakery and meat department. The next money making idea came when he bought too much cabbage, made it into his mom’s homemade sauerkraut, and sold it in his stores. This made him realize the potential of food manufacturing and has turned Kroger into one of the largest food manufacturing businesses in America with 37 food processing facilities. Today, about 40% of the company’s private label items come from these facilities and account for 25% of total sales. In 1972, it became the first company to test an electronic scanner. Today, the company uses QueVision which has reduced the time customers wait in line to check out from an average of 4 minutes to less than 30 seconds. One of Kroger’s most important concepts came in the 1970s when it interviewed 4,000 shoppers and became the first store to conduct customer research. In 2012, the company interviewed almost 2 million customers and has used the results to help guide its decisions.

While these innovations have had an important role in making Kroger the mega company it is today, it wouldn’t be nearly as successful without its mergers and acquisitions. Since 2006, the company has acquired more than 330 stores. The most notable merger was with Harris Teeter, which finalized in January 2014. This allowed the company to add 227 stores and enter new states and markets. After the successful completion of this merger, Kroger operated stores in 49 major markets and was ranked first or second in 41 of those markets. (A major market is one in which Kroger operates nine or more stores.)  By the end of 2013, the company employed 375,000 employees, operated 2,640 supermarkets, 1,947 of which have pharmacies, 786 convenience stores, 1,240 fuel centers, and 320 fine jewelry stores in 34 states and Washington D.C. Since 2004, it has grown its units from 3,229 to 3,426 today and its sales from $53.8 billion to $98.4 billion today.

Outside of monetary accomplishments, Kroger has made great strides in its sustainability efforts. In its 2014 Sustainability Report, CEO Rodney McMullen states one of the company’s slogans, “I, You, We Make a Difference” and outlines its three overlying areas of sustainability: Social, Environmental, and Economic.  Some of its social platform accomplishments include having donated more than 200 million meals through Feeding America Food Partners, donating $6 million in support of women’s health and breast cancer awareness programs, spending more than $1.7 billion to provide healthcare for many of its full and part time employees and retirees, and helping more than 30,000 K-12 schools and non-profits to raise funds for programs and supplies. Under its environmental platform, it has partnered with the World Wildlife Fund to support fishery improvement projects, successfully moved 27 of its manufacturing plants to have zero waste, achieved a total energy reduction of 34.6%, and is beginning to invest in water conservation projects. Two of its economic platform successes include creating 40,000 jobs since 2007 and investing more than $1 billion annually on minority and woman-owned business enterprises.

While many other stores struggled during the recession, Kroger wasn’t fazed by the troubling economy and has done its share to give back. In the past 2 years alone, Kroger has won 33 awards including the Black Pearl Award, which is given to one company a year from the International Association for Food Protection. While the company has been open for more than 100 years, it seems to only improve as it gets older. It is the company’s nonstop quest for innovation and sustainability that seems to take hold of consumer’s hearts and wallets. It has become more than a money making company, but a community staple that consumers look to not only shop, but to help make a difference.



Restaurant Chains


A mixture of innovation, trial and error, and a touch of hunger fueled two creative minds behind the largest popcorn retailer in the world. Originally founded in a small Manhattan apartment kitchen, Robert and Renee Israel brought their whole-grain GMO-free kernels to Boulder, CO, and created Doc Popcorn in 2003.

The healthier, all-natural flavored popcorn company remained small by operating only two company owned stores until the start of the recession, but no one could have guessed what the company would do next. Amidst the faltering economy and numerous retail closings, Doc Popcorn launched its franchising program in 2009 and experienced record-setting growth.  By 2010, the company had 12 units in full operation, all of which were franchised, showing no signs of stopping its expansion. With an average of one new location opening a week, Doc Popcorn nearly doubled the company’s location count in 2011, 2012, and 2013 with 22, 43, and 85 units respectively. As of October 2014, there were nearly 100 units spanning 28 states, District of Columbia, and Puerto Rico. Doc Popcorn can also be found in Mexico, and just this year, the company celebrated its first location in Tokyo, Japan.

Now, how did Doc Popcorn grow 2,933.3% in locations since 2009 into a worldwide leader in the multi-billion dollar snack industry? It’s simple. No, really, the concept is a simple idea resulting in a convenient and lucrative franchise. Doc Popcorn offers three types of businesses: “PopKiosk,” “PopShops,” and a self-containing mobile “poperating” unit known as the “PopCart” and two other mobile units under development – “PopTrailer” and “PopTruck.” These flexible units allow the company’s poprietors (franchisees) to operate in a variety of high-traffic venues including malls, schools, office buildings, hospitals, airports, colleges, health clubs, auditoriums, and arenas (concert and sports).

Doc Popcorn forecasts 22 locations to open in the next fiscal year, maybe even more, since the company has been recently acquired by Dippin’ Dots in July. Dippin’ Dots plans to support the expansion of Doc Popcorn’s footprint both within the U.S. and internationally. Doc Popcorn’s wide variety of distinctive flavors (Cheesy Cheddar to Hoppin’ Jalapeno to Sinfully Cinnamon) can be sold wherever the people are and the company is most definitely planning on it.