TJX Cos Inc, which owns T.J. Maxx, recently missed quarterly estimates after the highly contagious Omicron variant caused foot traffic in stores to lessen. Continuous global supply chain problems continue to hinder how off-price retail stores — such as T.J. Maxx and competitors Ross and Burlington — are able to conduct business.
For the most part, shipping costs, the spread of Omicron during the holiday season, shipping bottlenecks, product shortages, and price increases are to blame for this negative quarterly report.
The global supply chain has greatly affected many retail stores in 2021 — and it looks like this may continue into 2022 for certain industries. Off-price retail stores have seemingly bit hit hardest out of fashion retail stores. This has led to a consistent low stock in stores, which has obviously hindered business activity across the board for these companies. Many analysts are optimistic that the global supply chain will slowly get better in 2022, but this doesn’t necessarily mean these off-price stores will immediately see an increase in products in their stores.
For T.J. Maxx and other off-price stores, the main factor in their way to success is a low inventory. Likely, 2022 will see these companies work to try to increase their inventory. But this will be easier said than done, as the price to ship products has greatly increased.
Higher costs, in all its variations, are also to blame for this lackluster quarterly performance. It costs much more to ship products — and high inflation has also caused certain goods to rise in price. This has been reflected in the overall price of goods in these off-price stores, which has, in turn, impacted just how consumers spend money and shop at them. Off-price stores are known to have good discounts and deals. Consumers will not readily go shop in these stores if prices continue to be high.
In comparison, some other retailers did better than expected in their quarterly sales. For example, Walmart and Macy’s both posted better than expected quarterly reports, though their stores are quite different from stores like T.J. Maxx.
T.J. Maxx, according to this new data, didn’t do terrible throughout the year — but it didn’t do as well as the company thought it would. As the Omicron variant began to spread towards the end of the year, during the holiday season, sales noticeably decreased and sales did not reach this holiday peak that the company thought they would. The Omicron variant’s highly contagious spread likely kept consumers home from certain stores during this time.
Store closures earlier in 2021 during different stages of the COVID-19 pandemic also were to blame for the lackluster yearly report. However, the company is optimistic for the year ahead, just as many other retail stores are. Many analysts are anticipating certain things to go back to normal as the year progresses. The global supply chain may continue to work towards recovery, and high inflation may begin to moderate later on in the year. As people become used to living in a pandemic, consumers may be more willing to also shop in stores.