Hal Lawton on Tractor Supply’s Phenomenal Growth
Selling picks and shovels and pet food.
Shoppers arrive at a Tractor Supply Co. store in Merced, California, US.
Photographer: David Paul Morris/BloombergA bunch of companies saw their share prices boom during the pandemic. Peloton surged because no one could go to gyms. Zoom jumped because no one could go to the office, and so on. Since then, many of these companies have come crashing down back down to earth. However, one pandemic winner that has yet to see its stock price mean-revert is Tractor Supply Co. Its shares have been up about 270% since their 2020 lows. The retailer has ridden a demographic and cultural shift as more Millennials move away from cities and decide to become hobby farmers growing their own chickens, vegetables, and fruit. In this episode, we speak with CEO Hal Lawton about the Tractor Supply business model, including how it's bucked the post-pandemic pattern and what it's doing to lock in customers for the long term. This transcript has been lightly edited for clarity.
Key insights from the pod:
The typical Tractor Supply customer — 4:47
Sustainable vs. cyclical growth — 7:26
Customer retention and rewards — 13:19
Petsense acquisition — 17:48
Tractor Supply vs. Big Box stores — 22:17
How Tractor Supply decides to open distribution centers — 29:36
Wages and distribution workers — 33:44
Constraints on opening new stores — 37:28
Partnerships with brands — 41:36
The impact of higher rates on expansion — 44:41
Bringing self-development in-house — 48:03
Economic conditions right now — 48:55