NEW YORK – Off-price is the right price for millions of households in today’s economy, according to Placer.ai, a Silicon Valley firm that uses location analytics to gauge store traffic.
And as the leading off-price apparel chains – TJ Maxx, Marshalls, Burlington and Ross Dress for Less – outperform traditional apparel retailers in terms of traffic growth they are moving aggressively to expand or update their physical footprints, Placer.ai reported this month.
Burlington Stores plans to open some 100 stores this year and is more than halfway through a process of converting its 1,115 existing locations to a smaller, more efficient format. The TJX Cos. has announced plans for 93 new stores in 2025.
Likewise, smaller value-oriented retailers Ollie's Bargain Market and Five Below are on impressive growth trajectories, with year-on-year store visits surging 18.3% and 14.3%, respectively, in the second quarter.
Both chains are executing aggressive expansion strategies, with Five Below planning 150 new locations in 2025 and Ollie's opening 75 stores while acquiring 40 Big Lots leases, Placer.ai said. “Critically, the expansions are not coming at the expense of existing stores,” asserted Placer.ai, which noted that individual locations were busier in the second quarter despite the inceased store counts.
“These positive traffic trends underscore the strong consumer appetite for value-oriented discretionary retail in today's economic environment and highlight the growth potential of the two chains,” Placer.ai said.
Growth at the big four off-price apparel retailers “reveals that there are many formulas for success in the off-price space,” according to the firm. “While some companies have found success by attracting families looking to stretch their budgets, others are growing their visits by drawing singles looking to stock up on the latest styles without breaking the bank.”
Thorvardur de Shong
Investment bank Jeffries last week raised its price target on TJX Cos. to $160 from $155 citing the retailer’s potential to benefit from the “secular migration toward the off-price sector.” TJX shares are up 12.7% in 2025, besting the 9.9% year-to-date gain for the Standard & Poor’s 500 stock index.
Framingham, Mass.-based TJX posted a 7% jump in sales in the quarter ended August 2. Comparable sales increased 4% in the period. The company also raised its guidance for full-year earnings and profit.
“Longer term, we are convinced that we have a long runway ahead to capture additional market share and continue our successful growth around the world,” Ernie Herrman, president and chief executives officer, said in releasing TJX’s financial results.
Benefitting from consumer worries
Off-price retailers’ strong start to the year likely benefitted from consumer worries about inflation, a weakening job market, and the Trump administration’s gyrating trade policies.
And while shoppers spent at a healthy pace in July, economists say the figures underscore an anxiety among Americans that appears to have pushed them to step up their purchases of furniture and other items ahead of the expected price increases.
Retail sales rose 0.5% last month from the previous month, and June spending was stronger than expected, the Commerce Department reported earlier this month.
“Overall, consumers are no longer bracing for the worst-case scenario for the economy feared in April,” when President Trump announced a set of worldwide tariffs, according to Joanne Hsu, director of the University of Michigan's surveys of consumers. “However, consumers continue to expect both inflation and unemployment to deteriorate in the future.”
