Off-Price: Who Could Outperform?

One sector that could be very well positioned for a coronavirus comeback is the Off-Price retail space. Although the current situation puts these retailers in a compromising position, if pre-corona performance is any indication as to how these retailers will bounce back after the economy re-opens, these brands can quite possibly come out the other side with a positive outlook. 

Even more, the wider expectation of a focus on value, especially in a non-essential space like apparel, can be hugely important in a period likely to be defined by an economic downturn.

Pre-Corona Performance

Retailers like T.J Maxx, Marshall’s, Dillard’s and Ross Dress for Less have continued to outperform in the apparel sector throughout 2019 and this trend showed no indication of slowing down.  When we look at year-over-year growth for each of these retailers from the period of August 2019 to February 2020, the results are strong. All but December –  a month marked by fewer business days than the year before – yielded growth for at least 2 of the 4 brands analyzed, with Ross leading the way in almost every month.  Dillard’s also showed promise, with growth in every month except December and January.  And even those that had mixed results in late 2019, saw an exceptionally strong start to 2020.

But, the most intriguing narrative we see when analyzing year-over-year traffic for these brands is the significant growth in February 2020, the month whose end heralded the beginning of the Coronavirus impact in the US. The first two months of 2020 generated positive growth for almost every brand.  Each retailer saw monthly growth of at least 5.5% year over year with Ross leading the group with 17.7% growth.

Ross, Marshall’s, and T.J Maxx all saw traffic that was both steady, and above the baseline average for the period for nearly every month. But, due to closures at the beginning of March, all of the brands analyzed saw at least a 50.0% decrease in year-over-year growth for that month. 

With such significant year-over-year growth, it seems these retailers were gearing up for a pretty successful 2020 before coronavirus hit the states. 

Ross Dressing for Success 

But, if we look at Ross individually we see the most promising performance out of all brands analyzed. When looking at the first week of March, visits for the brand were 6.1% above the weekly average, a near 7% increase year over year for the equivalent week. And this while the COVID-19 effect was already being felt. Essentially, the brand was enjoying growth right up until stores began to close nationwide.

Another promising brand in the off-price sector is T.J Maxx. Alongside Ross, the retailer saw steady traffic c during the measured period, followed by a nice bump during the holiday season. Then early 2020 brought January and Feburary visits that saw strong growth for monthly traffic year over year. Moving into March, visits for the first week were 1.9% below the baseline average, compared to 1.1% below the previous year. This is only a 0.8% year-over-year traffic decrease, an impressive feat considering the apparel sector was already feeling the coronavirus impact by this point.

Off-Price Loyalty 

When it comes to customer loyalty, the number of visits per customer for a certain period of time can indicate a stronger relationship with the brand and its long term potential. And, Ross again is the front runner.  When looking at the period from August 2019 to February 2020, the retailer saw 3.0 visits per customer during this time span. But, the others weren’t far behind. T.J Maxx saw 2.8 visits per visitor, while Marshall’s saw 2.6 and Dillard’s saw 2.1 – a strong testament to the ability of top players in the sector to drive sustained success.

The cast that only a 0.2 visit difference separates Ross and T.J Maxx, speaks to a clear competition between the off-price retailers when it comes to loyalty. And, although Ross beats out all other brands in growth, this leaves the door open for another player to make a move. Now, with a range of brands like JC Penney expected to close if not shrink their physical footprint, an opportunity exists for these brands to grab new audiences and visits.


Overall, the off-price sector has a unique opportunity on its hands. Given the economic state in the US, with high-end retailers already slashing prices and selling off inventory, these retailers are positioned well to provide added value. And, the uncertainty about the economy and possible recession, is pushing people to shift their typical shopping trends to buy off-price. 

With an influx of excess inventory sitting at stores, retailers like Ross and T.J Maxx are hoping to scoop up the inventory and eventually turn that into bargains for their loyal shoppers.   

With the proper strategies in place, the off-price sector might be the one to watch during the inevitable re-opening of the economy. 

Check back in with the blog for more insights.

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