The unmatched thrill of bargain-hunting (Chip Somodevilla/Getty Images)
Found a $30 Michael Kors bag… under a shoe rack. TJX — the discount retailer behind TJ Maxx, Marshalls, and HomeGoods — is humming along as consumers scour its aisles for cute deals. This week, TJX beat quarterly sales expectations and boosted its outlook, because there’s no better feeling than finding perfectly fitting Levi’s for $11 after hours of scavenging.
It’s the “affordable splurge” vibes for me… and the unaffordable splurge for others. While discount retailers are banking on low prices, luxury retailers are enjoying resilient demand. Bloomingdale’s owner Macy’s raised its annual profit forecast as higher-income shoppers scooped up designer blazers and fancy beauty products. Macy’s isn’t the paragon of luxury, but it does stock more luxe goods than department rivals like Kohl’s. Interestingly:
The middle is an awkward spot… during an economic downturn. Lower- and middle-income consumers are moving downmarket to discount retailers like TJX and Walmart, while wealthier consumers are sticking with luxury brands. Meanwhile, more middle-of-the-road retailers are hurting: this week Kohl’s withdrew its annual forecast after sales fell 7% and Target cut its holiday outlook as demand slackened.