AGB 2021.15 - Tractor Supply (TSCO)

Rural Focus is a Competitive Advantage

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Tractor Supply

Tractor Supply is the largest retailer specifically targeting rural/semirural customers in the U.S. The average customer is a middle-income earner, married with children, owns a home and most importantly owns livestock (~50%) or a pet (~75%). Average customers shop 6 times per year and the best customers shop 2x-3x that number. Some of Tractor Supply’s customers are recreational farmers or ranchers but most are just living the rural/semirural lifestyle and shop at Tractor Supply for their everyday needs.

Most of the products sold at Tractor Supply are in the livestock and pet category (47% in FY20), which includes feed, bedding, seeds, etc. These products tend to have below than average gross margins but are very productive on a per square foot basis. They also drive foot traffic to the store. Many stores also offer pet services like PetVet clinic and PetWash centers. Hardware and tools (21%) and Seasonal …