Definition
Off-price stores are retail establishments that sell merchandise at significantly reduced prices compared to traditional retail stores. These stores obtain their inventory from various sources, such as excess stock, production overruns, closeouts, and merchandise from bankruptcies. The primary appeal of off-price stores lies in offering brand-name products at substantial discounts, which can attract a wide range of cost-conscious consumers.
Examples
- TJ Maxx and Marshalls: Both are part of TJX Companies, Inc., and are prime examples of large off-price retailers offering a wide array of brand-name clothing, home goods, and accessories at discounted prices.
- Ross Stores: Known for its slogan “Dress for Less,” Ross Stores specializes in offering deeply discounted fashion apparel, footwear, and home décor items.
- Burlington (formerly Burlington Coat Factory): Burlington is another prominent off-price retailer providing a range of products, including clothing, footwear, and home furnishings.
- Nordstrom Rack: This is the off-price retail division of Nordstrom, offering discounted prices on clothing, shoes, and accessories sourced from the main Nordstrom store inventory and discontinued lines.
Frequently Asked Questions
Where do off-price stores get their merchandise?
Off-price stores typically acquire their inventory from several sources, including:
- Overproduction by manufacturers
- Excess stock from other retailers
- Closeout deals resulting from bankruptcy
- Seasonal end-of-line products
How do off-price stores maintain lower prices?
Off-price stores maintain lower prices by purchasing inventory at deep discounts, minimizing operational costs, and often operating in less expensive retail locations compared to traditional department stores.
Are the products sold in off-price stores authentic?
Yes, the products sold in off-price stores are typically authentic and come from reputable brands. However, the merchandise might include out-of-season items, excess inventory, or products with slight imperfections.
Do off-price stores have the same return policies as traditional retailers?
Return policies in off-price stores can vary and may not be as lenient as those in traditional retail stores. It’s essential to check each store’s return policy before making a purchase.
Can off-price stores impact full-price retailers?
Yes, off-price stores can significantly impact full-price retailers by attracting price-sensitive shoppers who would otherwise buy from higher-priced competitors, potentially threatening the sales and profit margins of the latter.
Related Terms
Discount Store: A retail store that sells products at lower prices than traditional retail stores, generally by accepting lower margins.
Closeout Sale: A sale event for clearing out all inventory of a discontinued product or a product line, often at significantly reduced prices.
Liquidation: The process of converting a company’s assets into cash, typically at discounted prices, often in the event of store closure or bankruptcy.
Outlet Store: A type of retail store where manufacturers sell their products directly to consumers at discounted prices, usually because they are surplus or damaged goods.
Big Box Retailer: A large retail establishment, usually part of a chain, that offers a wide variety of products, often including groceries, electronics, clothing, and home goods.
Online References
Suggested Books for Further Studies
- “Retailing Management” by Michael Levy and Barton A. Weitz
- “Discount Retailing Strategies” by Howard L. Greenfield
- “The Retail Revival: Reimagining Business for the New Age of Consumerism” by Doug Stephens
- “Shopping, Place and Identity” by Peter Jackson, Nick Stevenson, and Kate Brooks
Fundamentals of Off-Price Stores: Retailing Basics Quiz
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