TJ Maxx may not be the most glamorous place to shop, but consumers are flocking to the discount retailer while at the same time they’re abandoning more established department stores like Macy’s and Nordstrom.
The latest quarterly earnings by TJ Maxx showed that the company’s comparable sales rose by 4 per cent - the 30th consecutive quarter of growth for the business, according to a story by Business Insider.
The publication noted back in May that retailers like Macy’s, Kohl’s and Gap all reported lower earnings, due to a warmer winter which saw fewer people buying winter items, and also growing competition from the internet, especially Amazon. They also noted that with so many retailers depending on sales, many at the same time, the discounts don’t have the importance they may have had previously.
TJ Maxx features lower prices all the time, and now they are getting higher-end, more authentic brands, which means that people willing to take a chance on what may be there are being rewarded by finding great treasures on brands they would normally buy at the department stores. As it states on the TJ Maxx website, they don’t rely on sales or gimmicks, “just brand name and designer fashions that are 20 to 60 per cent less than department and specialty store regular prices on comparable merchandise, every single day!”
Considering people are looking to stretch their dollars further these days, a place like TJ Maxx can give them much more return on their dollars.
Both Macy’s and Nordstrom have discount shops as well. Nordstrom does particularly well with its Nordstrom Rack stores – it even has more of them than its regular department stores – but that also means it’s letting its discount stores be successful over its full line stores, which would normally get a higher profit margin.
Macy’s is hoping some new blood can help turn its fortunes around. It recently named Richard Lennox as chief marketing officer, a former Toys “R” Us chief marketing officer at the toy retailer. This new hire comes as longtime CMO Martine Reardon stepped down after over three decades in the position. Macy’s recently announced that it is planning on closing 100 brick and mortar stores in light of sluggish sales.
Whether retailers can turn things around, or whether TJ Maxx is the new model for success is dependent on how the establishment can deal with a changing consumer landscape.