Brentwood, TN.-based Tractor Supply sells everything from tools to toys. The giant retail chain dominates the home improvement, agriculture, lawn and garden market. What makes Tractor Supply so newsworthy is that in a time when most retailers have suffered sales declines during this recession, their sales have gone up 150 percent. They just keep opening more stores—now 111 in 44 states—and recently announced their best ever sales of $1 billion.
So what’s the secret to Tractor Supply's recession proof sales? How do they just keep selling everything from chickens to charcoal? Their sales slogans provide a hint: “The Stuff You Need Out Here” and “Repair Don’t Replace.”
The company’s can-do attitude was recently underscored in a corporate sales meeting where Jim Wright, Tractor Supply’s CEO exclaimed, “We're gonna ignore the recession.” And so it has. Tractor Supply has seen a huge boost in same-store sales in the third quarter of 2012. Strong performance in core consumables, usable and edible products, mainly for pet food and animal feed helped generate a 2.9% increase in same-store sales on top of an 11.5% rise in the same quarter of the previous-year.
Wright took over the farm-store operator in 2004 and has overseen a 420 percent stock rise. He says that part of his job is to nurture the deep-rooted values that pervade every corner of the farm and ranch supplies' retailer. "The culture of a company is like the sand on a beach," said Wright. "Wind and water are always eroding it. It's the job of leadership to replenish the culture one grain at a time, all the time."
Tractor Supply’s corporate culture reflects those values. Every employee carries an ethics card that lists 10 corporate values. At the top of that list: "Do the right thing and always encourage others to do the right, honest and ethical things." Other values include respect, balance, winning attitude, communication, development, teamwork, change, initiative and accountability. The back of the card espouses Tractor Supply's mission: "To work hard, have fun and make money by providing legendary service and great products at everyday low prices."
The sales formula seems to be working. "Under his leadership, the company has transitioned into one of the best performers in hardlines retail," said Wedbush Securities analyst Joan Storms. "That has translated to a strong stock performance, cash flow and earnings power."
Wright has actually diagrammed his paradigm for sales success. Driven by what he calls a “retail engine,” he lists the corporate culture elements that protect the engine. These include "values, ethics, collaboration and risk taking." At the bottom are sales and profits drivers, which include "customer loyalty, team member loyalty, vendor loyalty and shareholder loyalty."
The key to recession-proof sales has many elements. It starts with a solid corporate culture that insists on placing the customer first. It continues by offering customers what they really need in these tough times—value for the money and service that adds value.
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