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TJX: Bargain Shoppers Want ‘Excitement’ From Their Retail Experiences

TJX Adds New Sustainability Goals

As consumers continue to spend cautiously, TJX is seeing bargain shoppers seek the surprise and delight of its stores’ luck-of-the-draw format, bringing joy in a financially stressful time.

The off-price apparel and home goods retailer, parent company of TJ MaxxMarshallsHomeGoods and others, shared in its first-quarter fiscal 2024 earnings results Wednesday (May 22) that comp store sales increased 3% year over year at a time when many retailers have been seeing shoppers pull back.

On a call with analysts, TJX CEO and President Ernie Herrman said this growth comes not only from its brands’ strong perception of value but also from the fun shopping experience that its stores provide customers.

“I really don’t know of any other retailer brick-and-mortar-oriented that is creating a treasure hunt of this excitement level and entertainment level because they’re trading so broadly as we are, and so that is extremely differentiated in this environment,” Herrman said.

Shoppers are seeking low-priced retailers. The February/March installment of the PYMNTS Intelligence “New Reality Check: The Paycheck-to-Paycheck Report” series drew from a survey of more than 4,200 U.S. consumers. It revealed that half have switched to cheaper retail merchants. Plus, 45% of low-income (those earning less than $50,000 annually), 41% of middle-income (those earning $50,000-$100,000) and 28% of high-income (those earning more than $100,000) shoppers said they had cut back on the quality of their purchases due to retail product price increases.

After years of cutbacks, consumers are seeking out joyful retail experiences. The Nonessential Spending Deep Dive Edition” of The Paycheck-to-Paycheck Report series revealed that 70% of retail shoppers buy “nice-to-have” items at least sometimes. By combining value-driven pricing with an engaging, treasure hunt shopping experience, TJX has attracted bargain shoppers looking for that excitement without straining their budgets.

Additionally, Herrman noted that the retailer is becoming “a cooler place to shop,” noting that its new customers skew young, and consumers are increasingly turning to the company’s stores for gifting occasions.

As consumers continue to seek out value, Herrman said he expects that more retailers will follow in the footsteps of Walmart and Targetlowering prices in categories where there is stiff competition.

This strategy can go a long way, per a PYMNTS Intelligence report that found 46% of retail shoppers are deal chasers, willing to go wherever they will get the best price, and 44% of grocery shoppers fall into the same category.

“Many retailers have been soft on traffic and transactions,” Herrman said during the call. “My prediction would be we’re going to see more of that talk about lowering prices on certain commodity items for them to try to get customers back.”

He added that this trend predominantly affects categories that do not make up the bulk of TJX’s business.

Many retailers have been coming up against this challenging economic environment. For instance, also on Wednesday, retailers Target and Petco both reported year-over-year declines in comparable sales in their most recent quarters. By captivating bargain shoppers and appealing to a diverse demographic, TJX continues to see growth where others are slipping.

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