Shoppers are flocking to TJ Maxx for deals as apparel prices soar elsewhere
- Same-store sales at TJ Maxx and Marshalls were up 18% in the most recent quarter versus the same period in 2019.
- Shoppers are flocking to off-price stores to nab discounts as prices rise elsewhere.
- Apparel prices overall were up by a record amount in June.
Shoppers are flocking to TJ Maxx to stock up on bargains as prices soar elsewhere.
The off-price chain saw sales rise in the most recent quarter as customers splashed out on new clothes to dress up as society gradually reopened.
Same-store sales at Marmaxx US - which includes TJ Maxx and Marshalls - rose 18% in the most recent quarter, ending July 31, versus the same period in 2019. Overall, its parent company saw same-store sales rise by 20% during this quarter versus 2019 across its HomeGoods, Marshalls, TJ Maxx, and TK Maxx brands. Its same-store sales were also up in the previous quarter.
According to data from Placer.ai, which tracks foot traffic analytics, off-price stores have continued to outperform regular apparel retailers over the past few months when it comes to foot traffic.
"It seems that customers who missed the treasure hunt experience at off-price store are now making up for lost time," the company said in a recent research note.
In a call with analysts on Wednesday, TJX Co said that it is in prime position to benefit from today's inflationary environment as customers look to stretch their dollars further.
According to the Department of Labor's June Consumer Price Index, apparel prices overall rose 4.9% in June versus the year before - the largest jump in a decade. In July, they remained flat.
While TJ Maxx is not immune to the industry-wide pricing pressures caused by rising freight and labor costs, it has more room to raise prices without the customer feeling the pinch. This is because TJ Maxx typically sells products at discounts that it says is 20% to 60% less than other stores.
For shoppers who want to go out and fill their baskets full of new clothes without spending too much cash, TJ Maxx can be an ideal option.
"Consumers are eager to treat and indulge themselves after a period of pandemic-induced austerity," Neil Saunders, managing director of GlobalData Retail, said in an email to Insider. "Given the high volumes of apparel being bought, and the fact that there are pressures on household incomes, TJ Maxx with its strong value for money position has been a major beneficiary of this trend."
Off-price stores are considered to be more recession-proof than other retailers. When times are tough, consumers tighten their belts and opt for more value-driven shopping experiences.
The years leading up to the pandemic indicated that bargain-hunting is popular even in a strong economy, as TJ Maxx and its rivals reported consistently strong growth.