Definition
A brick-and-mortar business is a traditional company that serves customers in a physical location—an owned or leased office, shop, or branch—where transactions and services happen face-to-face. Examples include neighborhood grocery stores, bank branches, salons, and many restaurants.
Why it still matters
Physical stores offer experiences that purely online retailers cannot fully replicate: customers can inspect and try products, receive immediate possession of purchases, get in-person service, and build personal relationships with staff. For some buyers, seeing a real address and storefront increases perceived trust.
Common terms (defined)
– E-commerce: buying and selling goods or services over the internet.
– Same-store sales (also called comparable-store sales): a retail metric that compares revenue from the same set of existing stores over two periods (excluding any newly opened or closed locations) to measure organic sales growth.
Advantages and disadvantages — quick view
Advantages
– In-person inspection and testing of goods.
– Instant delivery at point of sale (no shipping wait).
– Suits services that require physical presence (haircuts, auto repair, veterinary care).
– Can convey legitimacy and build local brand loyalty.
Disadvantages
– Higher fixed costs (rent for retail space, utilities).
– Ongoing staff payroll and store upkeep.
– Limited geographic reach compared with online-only sellers.
– Fewer customers per dollar of footprint versus warehouse/fulfillment models.
How brick-and-mortar retailers measure performance
Retail chains commonly report same-store sales to show how established locations are performing independently of expansion. On a national level, the U.S. Census Bureau publishes monthly retail sales and quarterly e-commerce figures to track trends.
Worked numeric example — calculating same-store sales growth
Step 1 — Choose the same store set: pick stores open during both periods (exclude newly opened or permanently closed shops).
Step 2 — Sum revenue for that store set for the two periods you’re comparing.
Step 3 — Compute growth percentage: (Current period revenue − Prior period revenue) / Prior period revenue × 100%.
Example:
– Prior-year sales for the comparable stores: $100,000
– Current-year sales for the same stores: $108,000
Same-store sales growth = (108,000 − 100,000) / 100,000 × 100% = 8% growth
Real-world adaptations (how brick-and-mortar competes)
Many physical retailers add online sales channels and hybrid services such as buy-online-pickup-in-store (BOPIS) or curbside pickup. Some e-commerce giants have opened physical locations to blend digital reach with in-person benefits. Membership models (e.g., warehouse clubs) and omnichannel fulfilment strategies can make physical footprints profitable by combining convenience and exclusive services.
Examples from the market (drawn from reported data)
– Membership retail: A warehouse club model that charges recurring fees can drive high renewal rates and steady foot traffic; reported membership counts and renewal rates are key performance indicators for such businesses.
– E-commerce pressure: Global non-store retailing (direct selling and online channels) has posted multi-trillion-dollar sales, underscoring why many retailers pursue omnichannel strategies.
– Store count: There were roughly 1,078,177 U.S. retail establishments as of Q4 2023, showing the large scale of physical retail even amid digital growth.
Checklist — evaluating a brick-and-mortar opportunity
– Location and foot traffic: Is the site accessible and visible to your target customers?
– Rent and fixed costs: Can projected sales cover lease, utilities, insurance, and maintenance?
– Staffing needs: Do you have staffing plans and labor cost estimates?
– Product suitability: Do customers need to touch or test this product, or require immediate service?
– Omnichannel plan: Will you integrate online ordering, in-store pickup, or delivery?
– Performance metrics: Will you track same-store sales, traffic, conversion rate, and average transaction value?
– Competitive positioning: Can you offer something online-only sellers cannot (service, immediacy, experience)?
Key numbers and trends (from reported sources)
– Global non-store retail sales were reported in the low-trillions (USD), reflecting heavy online and direct-sales activity.
– Some large retailers successfully combine online and physical channels; others have reduced store counts or closed locations in the face of competition.
– Physical-store openings, closures, and performance remain a significant element of the retail landscape; many chains still rely on store-level metrics to guide decisions.
Step-by-step checklist for managers to improve a store’s competitiveness
1. Audit customer experience (speed of service, displays, product demos).
2. Add an online ordering option with fast fulfillment (in-store pickup or local delivery).
3. Monitor same-store sales and traffic weekly or monthly.
4. Optimize staffing schedules to match peak hours.
5. Negotiate leases and vendor terms to control fixed costs.
6. Promote services unique to the store (repairs, fittings, consultations).
Sources
– Investopedia — Brick-and-Mortar: https://www.investopedia.com/terms/b/brickandmortar.asp
– U.S. Census Bureau — Retail Trade and E-Commerce: https://www.census.gov/retail/index.html
– National Retail Federation: https://nrf.com
– Costco Investor Relations / Corporate Information: https://investor.costco.com
Educational disclaimer
This explainer is for educational purposes only and is not personalized investment or business advice. Consult a qualified advisor before making financial or operational decisions.