Ollie’s Bargain Outlet is seeing encouraging results from expanding its furniture offering, but don’t expect home delivery services to become part of its business model anytime soon.
Speaking during the company’s June 3 earnings call, President and CEO Eric van der Valk explained that while furniture sales have helped improve store productivity, previous attempts to offer delivery services failed to generate sufficient customer interest.
According to van der Valk, the challenge comes down to economics. Offering free delivery would significantly impact the retailer’s margins, while charging customers the actual cost of transportation proved equally problematic.
“When we price delivery to cover the cost of delivery, the customer is not willing to spend it,” he said, noting that most shoppers simply do not want to pay additional fees after purchasing furniture.
The retailer has long positioned itself around a low-cost business model, and its website highlights the absence of home delivery as one of the ways it keeps operating expenses under control. For Ollie’s, maintaining aggressive pricing remains a higher priority than introducing costly delivery services.
The decision also reflects broader challenges across the retail industry. Moving large items, like furniture, is expensive, especially for companies that don’t have their own delivery networks. Large carriers like FedEx and UPS often add extra charges for oversized shipments, adding more pressure to shipping costs.
Ollie’s has other options, even though not offering delivery may be a hardship for some shoppers, especially those without the proper vehicles for big purchases. Shoppers can purchase furniture in-store and schedule pickup for a later date. For example, a customer may buy an item during the week and return over the weekend with a larger vehicle to collect it.
Beyond its retail operations, Ollie’s continues to invest heavily in its supply chain infrastructure.
During the first quarter, the company completed an upgrade of the warehouse execution system at its Lancaster, Texas distribution center, marking the final facility in its network to receive the technology enhancement. The upgrade is expected to improve operational productivity and warehouse efficiency.
The company is also moving forward with major expansion projects. An enlargement of the Lancaster distribution center is scheduled for completion early in the third quarter, while work to expand the Princeton, Illinois facility is expected to begin later this year.
According to van der Valk, these investments will significantly increase the company’s logistics capabilities.
“The two expansions will increase our network capacity to over 850 stores,” he said.
In addition to Lancaster and Princeton, Ollie’s operates distribution centers in York, Pennsylvania, and Commerce, Georgia. Inventory is shipped directly from suppliers to the company’s four warehouse facilities, where products are processed, sorted and prepared before being distributed to stores across its growing retail network.
Despite the increasing importance of furniture within its product mix, Ollie’s appears determined to stick to a strategy centered on operational efficiency and value pricing, even if that means leaving home delivery off the table for now.
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