Millennials continue to throw retailer off track. This sought after demographic in now dumping overpriced malls for dollar stores and discount racks according to this NBC report.
While legacy department stores like Macy’s and J.C. Penney are shuttering locations, off-price stores like T.J. Maxx are growing their brick and mortar presence.
In March alone, T.J. Maxx (which already has upwards of 1,000 stores), is opening in a slew of new locations. The discount retailer, which declined to comment, has good reason to be optimistic: According to its last earnings report, its 2016 sales topped $33.2 billion, an increase of 7 percent.
Other off-price retailers are also raking it in. Ross Stores saw net earnings increase 14 percent to $301 million in 2016, and fourth-quarter sales grew 8 percent to $3.5 billion. In the same time period, Burlington saw net sales spike 9.4 percent. Nordstrom’s fourth quarter earnings for 2016 showed an increase in net sales of 5.2 percent.
The success of off-price retailers appears to be directly — and negatively — impacting the success of traditional department stores.
The combination of low prices and the thrill of the bargain hunt appeals to the millennial shopper, who tends to be both shrewd and adventurous.
“Millennials are cost-conscious by nature,” said Misra. “Joining the labor force during and after the recession has heightened their frugality, and off-price retailers have been able to tap into that consumer need and outperform other retail categories.”