Why Tractor Supply Is One of the Most Interesting Retailers On the Planet

Tracy Alloway (0:10)

Hello, and welcome to another episode of the Odd Lots Podcast. I'm Tracy Alloway.

Joe Weisenthal (0:14)

And I'm Joe Weisenthal.

Tracy Alloway (0:16)

Joe, did you enjoy the tomatoes that I brought you?

Joe Weisenthal (0:20)

For listeners, Tracy has an amazing tomato garden that she posts pictures of, and I've become tomato obsessed over the recent years. And today she finally brought me in a box of tomatoes. I haven't eaten them yet as of this recording, but Tracy, they look absolutely amazing.

Tracy Alloway (0:36)

Thank you, I appreciate that.

Joe Weisenthal (0:37)

They look so good. They exceed the hype.

Tracy Alloway (0:40)

Let me tell you, a lot of equipment goes into growing tomatoes. So you look at the tomato and you think, I have probably spent maybe 50 bucks in tomato cages and fertilizer and compost in order to grow that one tomato.

Joe Weisenthal (0:54)

How many hours of your labor?

Tracy Alloway (0:56)

Well, I don't count that. My labor is cheap.

It's free for tomato growing.

Joe Weisenthal (1:01)

But yes, it's like gardening, all that stuff is a lot of gear. And one thing I know about you, Tracy, and this is, no, no, there's a compliment, which is that if you get into something like growing tomatoes, you take it very seriously. You're not just gonna like throw some seeds in the ground. It's what happens. You're gonna like buy all the right gear for it, see what the, you know, the frames and all that.

Tracy Alloway (1:22)

I kind of did just throw the seeds in the ground. Although actually I grew them, that's not true. I grew, I started them in an arrow garden in the kitchen in like February. And then I planted them in the ground.

But my point is that there are a lot of people nowadays who are into growing their own food or maybe having their own chickens for eggs. Lots of people have pets, including myself. And of course, there are businesses who cater to this particular type of thing.

Joe Weisenthal (1:50)

Right, not me because I don't have a garden or I don't have chickens or anything.

But yes, absolutely the sort of small farms, large gardens, et cetera, sort of seems to be a booming era, area, hobbyist, chicken owners like you, maybe one day in the future. And there's probably a lot of money to be made and selling to people like you.

Tracy Alloway (2:10)

Yeah, I am still very focused on my dream of declaring egg independence one day. But in the meantime, do you remember a couple months ago, we were speaking with Samuel Rines from Corbu and he mentioned a specific company that fits perfectly into this particular business. He talked about Tractor Supply and he called it one of the most interesting retailers on the planet.

Joe Weisenthal (2:33)

Right, I've always been curious about this company because it's one of the most remarkable stocks several years ago, it was a $1 stock.

As of today, when we're recording this on August 15th, it's a $222 stock. One of the huge sectoral winners, but also it's one of these companies where if you live in New York City, you probably never encounter them. But for much of the country, it's just this massive retail brand that's sort of thriving and taking over.

Tracy Alloway (3:04)

Yeah, it's sort of one of those sleeper hits kind of like Monster Beverage or Domino's Pizza. I'm happy to say where I live in Connecticut, there is indeed a Tractor Supply store and I enjoy going there. They let dogs in on a leash. So Pablo gets to come with me and sniff all the dog treats and look at the baby chicks and things like that. It is a fun experience.

Joe Weisenthal (3:25)

So the question is, how did this company build a absolute juggernaut?

How did they find people like you? How do people like you find Tractor Supply? And what is it that they have that others haven't been able to replicate or can't stomp out? Like, why doesn't Home Depot or Lowe's or Walmart or whatever just, or Amazon? Like, how do they thrive?

Tracy Alloway (3:45)

This is exactly it. And how much of it is them riding the sort of cottage core millennial hobby farm wave versus something maybe a little bit different? So I am very pleased to say that we are finally doing our Tractor Supply episode, our long-awaited Tractor Supply episode, and we do have the perfect guest. We're going to be speaking with Michael Roberto. He is the Bryant University trustee professor of management, and he has just published a case study for Harvard Business School, all on the Tractor Supply store. Michael, thanks so much for coming on Odd Lots.