With the 2010 holiday season behind us, we're getting a good sense of how the "new normal" is reshaping our shopping habits. As it turns out, the "new normal" is a lot like the old normal:
- Shoppers still gravitate toward brand names.
- Our hearts soar at the sight of a bargain.
- And rather than settle for subpar off-brand bounty, we'll do without or wait for our favorite four-letter word: s-a-l-e.
In other words, give us goods at either end of the frugal-fancy spectrum. Think Tiffany and Target. Coach and Costco
Woe is the retailer that is neither a high-end merchant nor a low-priced retailer. That leaves you languishing in the unexciting middle with department stores like Dillard's and Bon-Ton. And these days, the middle of the road is the surest route to mediocre returns in retail.
But a couple of companies have nailed the "new normal" just right by catering to brand-conscious bargain hunters. Investors, allow us to introduce to you the "off-price retailer."
Why pay full price?
"Off-price" retailers give consumers the best of both worlds, buying excess inventory from high- and low-end stores, then reselling it at discounts somewhere in the neighborhood of 20% to 70% less than the usual retail prices.
Retailers like Big Lots
But by far, the two leaders -- both in size and execution -- are TJX
Costco is a Motley Fool Inside Value selection. Coach and Costco are Motley Fool Stock Advisor picks. The Fool owns shares of Coach, and Costco. Try any of our Foolish newsletter services free for 30 days.
Alyce Lomax and Dayana Yochim do not own shares of any of the companies mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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