Tractor Supply Company (TSCO, Financial) reported torrid same sales growth of +27%, driven by a doubling of e-commerce sales as the Company's rural customer base relies on it for an increasing amount of discretionary and nondiscretionary purchases, delivered more conveniently than local, regional, and national competitors. Importantly, Tractor Supply also announced the acquisition of one of its regional competitors, Orscheln Farm and Home. The Company should add significant value to Orscheln's 167 store base by bringing in basic e-commerce capabilities, adding merchandising optimization, and helping with store modernization. We consider the vast majority of the Company's competition to be a long, highly fragmented pool of local and regional competitors, like Orscheln, which could represent a significant opportunity for return-accretive acquisitions over the next several years.
From David Rolfe (Trades, Portfolio)'s Wedgewood Funds first-quarter 2021 shareholder letter.
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