What: A Placer study on the state of off-price in the US.

Why it is important: Due to cost of life and multiple crises, this segment is poised for growth.

The off-price apparel sector has shown resilient growth in recent years. Chains like Ross, Burlington, TJ Maxx, and Marshalls quickly rebounded after initial pandemic closures. Visits to these off-price retailers were higher in 2021 compared to 2019 levels. The segment did see some slowing in growth during 2022 due to factors like Omicron, gas prices, and inflation. However, data from the first half of 2023 indicates foot traffic to off-price chains is rising again.

Specifically, visits grew 13.3% year-over-year for these retailers in June 2022, outpacing other apparel categories. This success is likely driven by consumers seeking bargains and deals amid high inflation. Growth was especially strong in Midwest and Northeast states, with some smaller markets like Iowa and Vermont seeing visits increase over 20%.

The major off-price chains have been expanding their store counts, but are also seeing more visits per individual store. This signals solid demand for off-price apparel. In addition, cross-shopping between chains is on the rise as bargain hunters visit multiple retailers in their hunt for deals.

While sharing an off-price positioning, the major chains attract slightly different demographics. TJ Maxx and Marshalls draw more suburban families, while Ross and Burlington appeal to urban singles who often shop later at night. Luxury off-price retailers like Nordstrom Rack and Saks OFF 5th are also outperforming their full-price sister stores.

Given its low prices and thrilling treasure hunt shopping experience, the off-price apparel segment seems poised for continued success moving forward.

The enduring success of off-price in the US