Unless you're selling brand name labels at a discount price, it's probably not the most enjoyable time to be in the retail space.
In 2024, lots of smaller, niche, or specialty retailers have lost market share to more desirable locales, as consumers watch their wallets more closely.
Though this has been a persistent trend for years now, some of it is part due to Covid-19, which accelerated an already sharp decline in popularity of places like indoor shopping malls. Nowadays, many shoppers opt for budget retailers (either online, at outlets and in strip plazas) in place of those once-popular indoor shopping hubs.
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The trend makes sense. Why drive farther and pay more for something you might find at a discount closer to home?
And with the cost of goods and services up from what they were one year – or even one month – ago, consumers are well within their rights to search for the best deals.
The Consumer Price Index shows that prices in April increased 0.3% from March. The CPI ticked up 3.4% on a 12-month basis, about in line with expectations but certainly showing no signs that inflation is coming down soon.
Here's a look at how the price of several key goods changed from March to April:
- Food: increase 0.3%
- Energy: increase 1.1%
- Apparel: increase 1.2%
- Shelter: increase 0.4%
- Transportation: increase 0.9%
- Medical care: increase 0.4%
TJ Maxx rising in popularity
With the rising cost of things from food to apparel, it's no wonder stores operated by TJX Companies (TJX) are so popular.
TJX, which operates several stores including TJ Maxx, Marshalls, HomeGoods, and Sierra, attributes its success to a relatively original model. It functions more as a middle man, procuring overstock items from brand name retailers and selling those goods at a discount to customers.
So rather than having to traipse into a mall for your favorite brand, maybe start looking at your local TJ Maxx, which likely stocks polo shirts by Ralph Lauren, Ugg slippers, Sperry Topsiders, and brand name hand bags.
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You wouldn't be alone in your endeavor. TJX Companies reported bumper Q1 earnings in late May, seeing a 6% increase in revenue year-over-year and an earnings-per-share beat of 6.34% at $0.93.
Marmaxx, which combines TJX's popular T.J. Maxx, Marshalls, and Sierra stores, were up 5% to $7.75 billion. HomeGoods sales rose 6% to $2.08 billion. Comparable store sales, which measures the performance of stores that have been in operation for over one year, were up 3%.
TJ Maxx solves for growing issue
But it's not all positive for TJ Maxx – or any retailer, for that matter. An uptick in in-store crimes, such as theft and organized retail crime, has more than a few top retailers sounding the alarm on the issue. Some have even said it's cutting directly into profit and dampening earnings.
So TJX has taken matters into its own hands, placing body cameras on some of its store associates to help prevent the issue.
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The body cameras, which are similar to the equipment police wear while on duty, are intended as a preventative measure – and to capture potential crimes as they're happening.
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“It’s almost like a de-escalation, where people are less likely to do something when they’re being videotaped,” said TJX finance chief John Klinger of the new installation.
Not all employees are required to wear the camera equipment. Only some stores have implemented the technology and are having their loss prevention associates specifically try it out. The associates are trained on how to use the equipment, and information is "only shared upon request by law enforcement or in response to a subpoena," according to a TJX spokesperson.
And while TJX expects its inventory shrink to remain relatively unchanged year over year, the issue remains a large one in the retail space as a whole. The National Retail Federation (NRF) estimates theft accounted for a total loss of $112.1 billion in 2022.
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