2016 Retrospective: Off-Pricers Ross, TJX Sales Surge

For the past seven years, sales for off-price retail have been surging. These retailers typically offer goods at 20 percent to 60 percent off the retail price, and 2016 was another banner year for two of the biggest retailers in the market: Ross Stores Inc. and The TJX Companies.

Ross Stores, headquartered in Dublin, Calif., opened 93 stores in 2016. Jim Fassio, the retailer’s president and chief development officer, said that the off-pricer was ready for more growth and eventually could reach a goal of 2,000 locations for its Ross Dress for Less division and 500 locations for its dd’s Discounts division.

TJX Cos. reported a 5 percent increase in its same-store sales at the end of its third quarter for its fiscal 2017 year. The results were reported Nov. 15, when the off-price giant ran a fleet of 3,785 stores across the globe. TJX started the quarter with 3,675 stores. Ernie Herrman, TJX Cos.’ chief executive officer and president, forecast that growth is on track to make TJX a greater than $40 billion company.

The market for off-price has been steadily gaining marketshare as prominent department chains shutter locations and seek to expand their off-price divisions or get into the off-price game.

Analyst Rohit Chhatwal wrote that the department-store retreat has ceded more dollars and more customers to off-pricers. In a Dec. 11 story posted in Seeking Alpha, Chhatwal noted that TJX might experience some turbulence due to its assertive expansion in Europe. The stronger dollar, fallout over the U.K.’s 2016 “yes” vote to leave the European Union and lower growth in the region have dealt some setbacks to the company’s margins. However, in the long run, the analyst believed that TJX Cos. would reap benefits from its Euro expansion.