Executive Summary

US off-price market leaders TJX Companies (which operates the T.J. Maxx and Marshalls banners), Ross Stores (which operates the dd’s Discounts and Ross Dress for Less banners) and Burlington Stores are expected to grow fast in the next few years. Consensus estimates suggest that, in aggregate, these three retailers will add an additional $13 billion in annual US sales between 2017 and 2021, equivalent to a 27% uplift. In this report, we analyze cross-shopping data, consumer profiles and geolocation data to explore which apparel rivals could lose out as these off-pricers grow.

• Our cross-shopping and consumer profile data show that TJX shoppers differ significantly from those who shop at Ross Stores or at Burlington. TJX shoppers are more affluent, and they tend to cross-shop at different stores than do shoppers who buy from Ross Stores or Burlington.
• Target and Old Navy look set to face strong competition from TJX. Our consumer data show that T.J. Maxx/Marshalls shoppers cross-shop at Target and Old Navy at high rates. The demographic profiles of these three retailers’ shoppers are very similar, and a high proportion of Target’s and Old Navy’s store estates have a TJX store located nearby.
• Walmart could face challenges from Ross Stores and from Burlington. Ross Stores shoppers and Burlington shoppers tend to cross-shop for apparel at Walmart at high rates, and all three retailers register shoppers with below-average income levels. In relative terms, Walmart’s store estate faces limited exposure to Ross Stores and Burlington outlets, but in absolute terms, a large number of Walmart stores see local competition from these retailers.