Retailers across the U.S. continue to reevaluate growth strategies as cautious consumer spending and slower discretionary demand force companies to prioritize profitability over rapid expansion.
For some chains, that means closing underperforming locations, slowing new store openings, and redirecting investment toward businesses with stronger long-term returns.
Now, one of the nation’s largest rural lifestyle retailers is taking similar steps as it navigates an increasingly challenging operating environment. The company is closing dozens of stores, scaling back expansion plans, and withdrawing its long-term financial framework as it adjusts to changing consumer behavior.
Founded in Chicago in 1938 as a mail-order tractor parts business, Tractor Supply Co. has grown into the largest rural lifestyle retailer in the U.S. The retailer expanded its pet business with its 2016 acquisition of Petsense, a specialty chain that sells pet food, toys, and supplies while also offering services such as professional dog grooming and in-store pet adoptions.
Tractor Supply confirms store closures and slows expansion
Tractor Supply (TSCO) will close approximately 75 underperforming Petsense stores following a strategic business review.
“We believe these actions will improve returns, simplify the business, and allow us to direct resources towards higher growth, higher return opportunities,” said Tractor Supply CEO Hal Lawton during the company’s second quarter of fiscal 2026 earnings call.
The retailer is also slowing its expansion plans. It now expects to open approximately 85 to 90 new Tractor Supply stores in 2027, down from its previous target of 100 locations.
Instead, the company plans to focus on strengthening its existing footprint by investing in Project Fusion remodels, optimizing store locations, and expanding its Final Mile delivery network.
“Together, these investments will improve the customer experience, enhance store execution and productivity, and drive stronger returns across our existing store base,” Lawton added.
Why Tractor Supply is closing Petsense stores
Pet-related products account for roughly 20% of Tractor Supply’s business, but the company said growth across the category has slowed as consumers become more selective with discretionary spending.
“What has changed is customer spending behavior,” said Lawton. “Customers continue to invest in the care of their pets, animals, farms, and properties, but they’re shopping more deliberately, consolidating trips, and prioritizing needs-based items while taking a more measured approach to discretionary purchases.”
Here’s some of my previous coverage of store closures:
- Sportswear giant continues store closures nationwide
- Grocery chain makes final major business closure
- Popular breakfast chain sold, 16 locations shut down
The Petsense closures are expected to result in approximately $71.7 million in impairment and other charges, including a $5.9 million inventory write-down.
The announcement comes just months after Tractor Supply acquired veterinary services provider VIP Petcare in May 2026. The business operates clinics in about 2,700 retail locations, including 1,700 Tractor Supply stores. The acquisition generated $9.5 million in related expenses during the quarter.
“The acquisition fills an important gap in our pet ecosystem, allowing us to connect veterinary services, prescriptions, and products across physical and digital channels,” said Lawton.
The closures and slower expansion reflect Tractor Supply’s broader effort to improve profitability as softer discretionary spending continues to weigh on parts of the retail sector.
Amy Beth Bennett/South Florida Sun Sentinel/Tribune News Service via Getty Images
Tractor Supply lowers outlook amid retail headwinds
Tractor Supply’s strategic shift comes after a weaker second quarter, reflecting continued pressure on consumer spending.
During the second quarter of fiscal 2026, the company reported:
- Comparable sales declined 1.5%.
- Comparable transactions fell 1.7%.
- Net income decreased 1.5%.
In response, the retailer withdrew its long-term financial framework and reduced its full-year guidance.
Tractor Supply now expects fiscal 2026 sales to increase between 2.5% and 3.5%, down from its previous forecast of 4% to 6% growth. It also expects comparable-store sales to range from a 1% decline to flat for the year.
As of June 27, Tractor Supply operated 2,463 namesake stores across 49 states and 209 Petsense by Tractor Supply locations in 23 states, underscoring that the closures represent a relatively small portion of the company’s nationwide footprint.
Related: Ikea closing key U.S. stores