Five Below is a reliable destination for novelty items, games, and gadgets, making it a great place to shop for party supplies or affordable gifts. For almost two decades, items were priced as the name suggests—below $5—but in 2019, price tags were upped, Forbes reported. In an explanatory note to customers, the retailer said that it had to raise tech item prices above $5 in order to "keep providing the products you love," calling the initiative "Ten Below Tech." New toys and games were introduced as well, priced between $6 and $10 in the "Ten Below Gift Shop." Now, Five Below is making yet another change—and this time it's converting 400 stores to include its higher-priced section. Read on to find out what the retailer has planned.
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Five Beyond is expanding its original concept.
In 2023, shoppers can expect to see redesigned Five Below stores. According to statements made by CEO Joel Anderson at the 2023 ICR Conference on Jan. 9, 400 stores will be converted to its higher-priced Five Beyond store format this year, Retail Dive reported.
This concept was rolled out at approximately 250 Five Below stores in 2022, which now sell items "beyond $5 and still way below the rest," the retailer's website states. Per Retail Dive, Anderson noted that customers have responded positively to the Five Beyond format—and they spend twice as much.
"It's not just about new stores opening this way, it's about taking the existing fleet and converting it," Anderson said (via Retail Dive). "We see an immediate lift the week after we change it."
It's a store-within-a-store concept.
Five Beyond stemmed from "Ten Below" concept, starting out as just a shelf in Five Below stores, according to Retail Dive. Now, it's a full-blown store-within-a-store.
Online, featured Five Beyond products range in price from $8 up to $25, with a skateboard, a Bluetooth speaker and tripod stand, and an adjustable barbell and dumbbell set among the pricier picks. On a Dec. 1 episode of CNBC's Mad Money, Anderson also showed a Roomba-style vacuum cleaner that's part of the Five Beyond line, retailing for $25
Anderson explained that the company "still believes in Five Below," but both store concepts are centered around value. "That's what we're focused on delivering," he said during the interview.
Five Beyond stores are just one component of ongoing changes.
While shoppers will find more expensive items in stores, they'll also see more stores in general. Five Below plans to open over 200 new stores by Jan. 24, Retail TouchPoints reported, keeping pace with plans to open 1,000 new stores by 2025.
The retailer is also expanding assisted self-checkouts, which are already available in 70 percent of Five Below locations, per Retail Dive. According to Seeking Alpha, having the assisted self-checkout option allows associates to spend less time behind the register and more time on the floor helping customers, and CFO Ken Bull confirmed that it helps when lines are long.
By 2025, the retailer plans to have self-checkout in place at all locations.
Five Below had a strong holiday season.
According to Retail TouchPoints, Five Below saw a spike in net sales during the holidays, rising over $1 billion between Oct. 30, 2022, and Jan. 7, 2023.
"We are pleased with our holiday performance, with results in the upper end of our fourth quarter sales guidance range," Anderson said in a statement to the outlet.
The CEO attributed this success to strategic marketing and diverse merchandise across its "eight worlds," which are essentially its departments: Tech, Create, Play, Candy, Room, Style, Party, and New&Now. Moving forward, the retailer only expects things to improve.
"Given this holiday performance, we now expect to finish the fourth quarter and full year near the high end of our previously provided guidance ranges," Anderson said.