Retailers have faced years of disruption — store closures, supply chain problems, ecommerce growth, and bankruptcies. The core point is simple: mature retailers cannot rely on one growth model forever.
An article examined 32 mature publicly traded U.S. retailers from 2016 to 2024 and found they tend to fall into three stages. Some can still grow by opening new stores. Others need ecommerce to drive growth. The rest have limited revenue upside and must focus on cost reduction.
The difference between winners and losers came down to discipline. Stronger retailers grew revenue faster than expenses. Weaker ones let expenses grow faster than sales.
When Store Expansion Stops Working
For retailers still able to open stores profitably, the priority is controlled growth. The report highlights Costco as a strong example because its store expansion still produces higher revenue growth. Costco’s model is clear: low prices, strong product quality, bulk buying, efficient stores, and consistent service.
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But store expansion has a limit. It contrasts Costco with Walmart, which eventually reached a point where adding stores no longer produced matching revenue gains. The lesson is to slow or stop expansion before new locations weaken returns.
For retailers with limited room to add stores, ecommerce becomes the next growth lever. Walmart is the key example. After shifting away from store-led growth, it built online retail into a much larger part of the business. The article notes that online revenue grew from less than 3% of sales in 2016 to 21% in fiscal 2026.
Walmart’s shift worked because it treated ecommerce as its own channel. It adjusted online pricing to compete with Amazon, changed product assortments, and balanced digital growth with its store business. That kind of pivot is not new in retail history. Companies that successfully transitioned from one growth model to another — think of department stores that once added catalog sales — usually did so without trying to do everything at once. The difference today is the speed required and the cost of getting it wrong.
The Cost-Cutting Option
When revenue growth slows, profit depends on cost control. The article uses Dillard’s as the main example. It moved away from buying more inventory simply to chase growth. Dillard’s reduced markdown risk, bought more conservatively, and prioritized profit. It also shortened weekday store hours, reducing overlapping shifts and lowering employee headcount.
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These moves helped lift pretax income from an annual average of $132 million between 2016 and 2020 to $1.1 billion in 2021. That’s a dramatic swing — and it happened without any new stores or a massive ecommerce push.
The contrast with Nordstrom shows the risk of choosing the wrong strategy. Nordstrom pursued growth initiatives, but expenses rose faster than revenue, which hurt profitability.
The broader lesson is that retailers must know which stage they are in. Store expansion, ecommerce growth, and cost reduction can all work, but only when matched to the company’s actual position.
