We recently did a deep dive into At Home’s business, which can be found here. At Home, like others in the home furnishing category, is having a difficult year as it laps the unprecedented gains that came during the pandemic. We expect that headwind is likely to last until its share of real consumption returns to its pre-pandemic level, which should take around three more years (see the PCE report in the economics section below). For those that haven’t visited an At Home store, it's a mash-up of HomeGoods, Pier One, Ikea, Bed Bath & Beyond, Hobby Lobby, The Container Stores, and Bob’s Discount Furniture (several photos from an At Home location are shared in the presentation).
Nationwide, there are 260 At Home stores and they are expanding at a rate of around +40 locations per year. The new locations are around 25,000 square feet in size and they produce a strong 240K visits annually (80% of what powerhouse HomeGoods delivers on an annual basis). Moreover, the two brands have a lot of cross-visitation. Bed Bath & Beyond is the other brand that the two shared a lot of cross-visitation with. In our review of At Home, we identify that the At Home brand and offering resonates across markets and states and in both cities and suburbs. At Home visits characteristics suggest consistent execution in real estate, merchandising, and marketing.
At Home should be a natural beneficiary of Bed Bath & Beyond exiting the market, as should HomeGoods (our blog team recent discussed some other potential beneficiaries). However, our analysis of visitation for the recent October through March period (below) shows that no transfer has taken place yet. This lack of transfer has been true of other retail failures in the past, where the demand in the near-term just vanishes from the market. It takes time for the jilted customers to migrate to a new chosen and trusted alternative. As that occurs, it will help At Home outperform its category and work to offset the consumption headwind discussed above.