COVID-19 Effects on Off-Brand Retailers
To establish how COVID-19 is affecting the revenue forecasts for off-brand retailers like Burlington, TJ Maxx, Ross Stores, and Marshalls and identify if more people will be pushed into shopping at value brands like these because of low unemployment or if more people will use online shopping and eschew in-store completely. To provide overall research that quantifies how foot traffic to off-brand retailers will be affected by behavioral and economic changes.
Effects on Off-Brand Retailers
- In the recent past, analysts have upgraded Ross Stores and TJX Cos (the parent company of TJ Max), As the pandemic, continues to spur uncertainty. Full-line retailers have continued to look for defensive measures to stay in business.
- Off-brand retailers have been subjected to widespread cancellation of orders and this could lead to the greatest buying environment for off-price. Some brands are working to reduce their off-price exposure.
- An article published by CNBC on May 10, 2020, provides that the unemployment rate in the U.S has hit new levels since the Great Depression. In April, 20.5 million jobs were lost according to the U.S records. Many economists continue to warn that the jobless rate of close to 15% does not fully reflect the crisis toll on the American workforce.
- Despite the unemployment statistics and the ongoing crisis, off-brand retailers are still hopeful that they will re-engage to clear inventory from the second half of 2020. TJX, for instance, hopes its inventory will linger well into 2021 because. just like in the last recession, consumers may want to uphold value-seeking patterns, even as economic conditions stabilize.
- However, an article published by CNBC provides that TJ Maxx, among other off-brand retailers, had to close all its stores in North America, Australia, and Europe for two weeks in March. On March 19, TJX also announced the withdrawal of its earnings outlook for both the current fiscal year and a quarter, as well as reducing its revolving credit facilities by $1billion.
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