Millennials ditching cities for the US countryside are boosting sales at rural businesses, the CEO of a $22 billion agriculture retailer says
- The pandemic has encouraged some millennials to move out of US cities to rural areas.
- Because of this, sales at some rural businesses have boomed.
- "We are seeing a revitalization of rural, led by millennials," Hal Lawton, the CEO of a $22 billion agricultural retailer, told CNBC.
Millennials are increasingly fleeing the city in pursuit of country life, and it's boosted sales at some rural businesses.
In an interview with CNBC's John Cramer on Monday, the CEO of Tractor Supply, which sells agriculture, home-improvement, and pet-care products, said a new group of millennial shoppers had helped boost sales in the most recent quarter.
"We are seeing a revitalization of rural, led by millennials," CEO Hal Lawton told Cramer. "We saw a 4 point sales penetration change last quarter with the millennial cohort." Sales penetration is a measure of how big a portion of the market a business controls.
Tractor Supply has nearly 2,000 stores in 49 states, mostly located far from major cities. It has a market cap of $22 billion.
The pandemic has accelerated migration from cities to the suburbs and rural areas, with people taking advantage of working from home to leave their apartments for more space in the countryside.
In a 3,000-person survey from Cowen & Company, 48% of millennials reported living in the suburbs in 2020, versus 44% in 2019. The same trend was true of the Gen Z consumers surveyed, i.e., people born after 1996 - 49% said they lived in the suburbs in 2020, up from 41% in 2019, Insider's Avery Hartmans reported.
Lawton noted that more millennials were buying houses too, thus boosting home-improvement sales at his store. According to Apartment List's Homeownership report, millennials led the pack in home buying in 2020. For many, moving out of expensive city centers helped them get on the property market.
Country life isn't for everyone, however. While some New Yorkers were reported to have fled the city at the height of the pandemic, many just made the transition from more densely populated areas of Manhattan to Brooklyn.