We shopped at Ross Stores and TJ Maxx to see which was a better store - and the winner was clear
Our first stop was Ross Stores in Center City, Philadelphia. Ross is the largest single off-price retailer in the US. It has 1,432 locations in 38 states.
This store was split into two separate sections: women's on one side, and men's, kids, and homewares in another.
At the front of the store, there were signs that gently reminded shoppers not to open packages. It's instantly apparent that this is not going to be a high-end shopping experience.
Ross Stores has a tighter handle on inventory levels than department stores do. This means there are fewer markdowns, and new items hit stores more frequently.
Source: Morningstar
At the front of the store, there was a section devoted to women's jewelry. We spotted rings costing as little as $6. Despite this, the jewelry was locked up in a cabinet.
Off-price retail is considered to be Amazon-proof, as it's hard to replicate the bargain-hunt shopping experience online.
As the emphasis here is on the bargain, there is less of a focus on the actual shopping experience.
"We think consumers have become more price-oriented and willing to trade customer service and an expensive store design for 20%-60% discounts on the same brand-name merchandise," Morningstar analyst Bridget Weishaar wrote in a research note in April.
In some areas of the store, the racks were bare ...
... and the clothing felt unfashionable.
But ultimately, it was very cheap.
The store was strangely laid out. Snacks were seen in bins next to womenswear ...
... and large amounts of space were left unused.
There were signs informing customers that Ross is 20-60% cheaper than department stores.
Ross has benefited from recent department store closings. It's gained new customers and opened up more possibilities with brands who are now left with fewer places to sell their products.
Source: Morgan Stanley
In a call with investors in March, CEO Barbara Rentler said that children's wear was the best performing category during the fourth quarter of 2017.
There was a ton of children's clothing that was split out by the style of the item, such as sets, dresses, and trousers.
Source: Ross Stores
The most impressive part of the store was its shoe collection across men's, women's, and kids. There was a good selection of well-known brands such as Nike, Adidas, Puma, and Michael Kors.
Ross has about 800 merchants who source from 8,000 vendors, according to Weishaar. In shoes, we found that lots of the same brands were clustered together.
Some of the more expensive items were boxed up.
Almost half of the store was dedicated to homewares and furniture. This was a more organized department.
Ross proudly reminds its shoppers that this is a "treasure hunt."
There is no TJ Maxx location in central Philadelphia, so we headed to a mall just outside the city in Columbus Crossing.
This store was almost brand-new. It opened in November 2017.
TJ Maxx instantly set a different tone. The front of the store had a department store-style layout with a curated selection of seasonal clothing.
It felt less like a treasure hunt as there were multiple pieces of the same style.
Out first impressions were great. Handbags were arranged by color, which made it easy to shop for the style you want.
It felt very similar to any full-price store, except that designer products cost 20-60% less here.
The beauty section at TJ Maxx had a better mix of well-known brands than Ross. And, unlike at Ross, it didn't look like they had already been opened and tested.
In this section, we were reminded that this is still an off-price store.
Some areas were more chaotic.
As TJ Maxx is an international company, it stocks a diverse mix of brands. It sources products from over 20,000 vendors in 100 different countries.
The shoe section was less impressive than Ross', but we did come across a wide selection of the same styles.
Source: Morningstar
The product selection is tailored to each store. This is because it has an inventory management system that analyzes data to show what customers want most in each location.
There was lots of variety in the kids' section of the store, and it was easy to shop.
We spotted dozens of Michael Kors, Ralph Lauren, and Calvin Klein products around the store. These companies have all said they are looking to scale back from the off-price channel to improve their brand image.
Source: Business Insider
In February 2017, TJ Maxx pulled back from the Ivanka Trump brand and told employees to throw away signs advertising the brand. We found a pair of Ivanka Trump trousers hidden in the clearance section.
Source: The New York Times
This location benefited from having a HomeGoods store connected to it.
TJ Maxx's parent company, TJX Companies, also owns Marshalls and HomeGoods.
As we headed to the cashier, we came across TJ Maxx's food section. Here you could find anything from Himalayan sea salt to an expensive-looking jar of pickles. According to Bon Appetit, TJ Maxx stocks food items that have been made especially for them, rather than selling overstock.
One manufacturer told Bon Appetit that TJ Maxx buys mixed cases from them because they don't want too much of the same item.
"They do this to create a sense of FOMO," Wharton marketing professor David Bell told Bon Appetit. "When it's gone it's gone."
Source: Bon Appetit
The walk to the cashier is the last chance shoppers have to grab those final bargains, and there is more than enough for the taking. TJ Maxx positioned some of its smaller items and grab-and-go produce here for customers making a speedy visit to the store.
Our verdict: TJ Maxx was the clear winner here. This location definitely had an advantage over Ross, as it had just recently opened. However, it wasn't just the glitzy store design and layout that was infinitely better — the assortment was also more impressive.
Ross definitely looked and felt like the cheaper store, and it is.
The fact that it is performing better than TJ Maxx from a same-store sales perspective is telling of the current climate in retail. Many customers are prioritizing price over everything else.
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