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Here's how TJ Maxx keeps its prices so low

Business Insider/Mary Hanbury

TJ Maxx is thriving in today's retail climate. One reason for that is its low prices.



TJ Maxx's parent company, TJX Companies, reported on November 20 that comparable sales were up 9% at TJ Maxx and Marshalls in the most recent fiscal quarter.



Here's how TJ Maxx keeps its prices so cheap.

TJ Maxx is thriving as other retailers struggle. TJ Maxx's parent company, TJX Companies, reported on November 20 that comparable sales were up 9% at TJ Maxx and Marshalls in the most recent fiscal quarter. It was the 17th consecutive quarter that customer traffic was up at the stores. The off-price retailer has been benefiting from a disappearing middle class and higher demand for budget options - two factors that have been hurting department stores like JCPenney and Sears. Shoppers have largely become accustomed to heavy discounting in the past decade. "The value-seeking mindset is an interesting one as it is often assumed that it is most prevalent during times of economic difficulty. However, our data shows that it is now an underlying constant in terms of what consumers look for when shopping," Neil Saunders, managing director of GlobalData Retail, wrote in a note to investors in August. TJ Maxx is able to keep its prices low using a number of different strategies. According to the company, much of it comes down to the way TJ Maxx buys its merchandise. It purchases stock from manufacturers that make too much and department stores that overbuy, and it jumps on deals at the end of the season. Here's how TJ Maxx sells its designer goods at such low prices:
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