Why Off-Price Retail Is Rising As Department Stores Are Sinking
For years, off-price chains have been luring shoppers out of department stores with prices up to 70% lower than traditional retail. And as department stores continue to experience declining foot traffic and slash store counts, off-price retail has begun to flourish. Moody’s projects sector sales to rise between 6% and 8% this year, while operating income could grow at least 4%. Profit gains will likely be driven by increased top line sales, an expanding vendor base and more efficient supply chain operations, Christina Boni, vice president and senior analyst for Moody’s, told Retail Dive. While entrants from traditional department stores like Macy’s and Kohl’s have recently emerged, four core players are expected to dominate the field: TJX Companies, Ross, Burlington and Nordstrom Rack. This year, off-price chains are ramping up new store programs and digging deeper into beauty, home and gift categories, all while protecting their core apparel businesses. For now TJX remains the market leader, but experts say others are nipping at its heels. Read more at Retail Dive.
