We went shopping at TJ Maxx and Nordstrom Rack to see which was a better discount store, and the winner was clear

We found an extensive selection of designer handbags at Nordstrom Rack.

caption
We found an extensive selection of designer handbags at Nordstrom Rack.
source
Business Insider/Mary Hanbury

  • Nordstrom is increasingly leaning on its off-price concept, Nordstrom Rack, for growth.
  • These discount stores now exceed its full-price locations. Nordstrom operates 239 Rack stores in the US and 122 full-line stores.
  • TJ Maxx, meanwhile, has reported strong same-store sales numbers for several years, using a similar discount model.
  • We compared the shopping experience at Nordstrom Rack and TJ Maxx to find out which off-price store is better.

Off-price shopping is on-trend.

TJ Maxx is a shining example of what is working in today’s brick-and-mortar shopping environment. The US’ largest off-price chain has reported strong same-store sales number for several years while department stores look on enviously, reporting weaker sales and being forced to close stores.

Rather than lose out to the off-price channel, some department stores are working on creating their own version, like Macy’s, which is doubling down on its Backstage concept.

Nordstrom’s off-price offshoot, Nordstrom Rack, predates TJ Maxx, however. It was launched in 1973, three years before TJ Maxx, in the basement of one of its full-price stores in Seattle, and it sold clearance clothing from the main store. In recent years, it has become one of the biggest areas of growth for the company, and these stores now outnumber Nordstrom’s full-price locations.

In its most recent quarter, same-store sales at Nordstrom Rack cooled slightly, up by 0.4% versus a 3.7% increase the previous quarter. However, the trend for the past three years has been that these stores are outgrowing their full-price sister locations.

After putting Macy’s off-price concept to the test in June, we decided to see how Nordstrom Rack fared in comparison to TJ Maxx. Here’s what we found:


We headed to Nordstrom Rack in Manhattan’s Union Square on a sunny afternoon in July.

source
Business Insider/Mary Hanbury

Much like TJ Maxx, Nordstrom Rack sells designer brands at a 30-70% discount.


The layout of the store felt a lot like a TJ Maxx …

source
Business Insider/Mary Hanbury

… as did the accessories section. Cheaper jewelry hung from racks, and more expensive pieces were locked in a cabinet.

source
Business Insider/Mary Hanbury

All beauty products were self-service.

source
Business Insider/Mary Hanbury

However, the brands were high-end.

source
Business Insider/Mary Hanbury

While the premise is the same as TJ Maxx, it felt like a more upscale version.

We found an extensive selection of designer handbags at Nordstrom Rack.

caption
These Marc Jacobs handbags cost almost $200.
source
Business Insider/Mary Hanbury

These Tumi suitcases were nearly $400.

source
Business Insider/Mary Hanbury

The store was mostly split out by individual brands, which made it easier to shop and less of a bargain hunt.

source
Business Insider/Mary Hanbury

We spotted lots of exclusive labels such as Rag & Bone, Theory, and 7 For All Mankind, which are less likely to be found in a TJ Maxx store.

source
Business Insider/Mary Hanbury

However, there was definitely some cross-over between the brands that were stocked in both stores.

caption
Calvin Klein is also prevalent in TJ Maxx.
source
Business Insider/Mary Hanbury

In the clearance section, different labels were jumbled in together.

source
Business Insider/Mary Hanbury

Around 20% of what is sold in these discount stores is clearance inventory from its stores and website. Most items are bought specifically for the Nordstrom Rack store.

source
Business Insider/Mary Hanbury

Source: Racked


Taking that into consideration, you might not be getting as good a deal as you think.

source
Business Insider/Mary Hanbury

The layout in the Nordstrom Rack shoe section was very similar to TJ Maxx, but it did feel more organized.

source
Business Insider/Mary Hanbury

There were multiple sizes in some styles …

source
Business Insider/Mary Hanbury

… and on well-known brands.

source
Business Insider/Mary Hanbury

These stores have become a key area of growth for Nordstrom. Same-store sales here have outpaced its full-line stores for the past three years, especially online.

source
Business Insider/Mary Hanbury

For this reason, the company has been growing its off-price store locations: Nordstrom now operates 239 off-price stores and 122 full-line stores in the US.

source
Business Insider/Mary Hanbury

Nordstrom said it would be opening 12 new Nordstrom Rack stores in 2018 and only one new Nordstrom.

caption
The no-frills checkout area was just like TJ Maxx.
source
Business Insider/Mary Hanbury

Next, we headed to TJ Maxx in Downtown Manhattan. Menswear and luggage were at the entrance to the store. We instantly spotted some recognizable brands such as Samsonite and Nautica.

source
Business Insider/Mary Hanbury

Seasonal clothing was put front and center.

source
Business Insider/Mary Hanbury

We spotted dozens of well-known brands.

source
Business Insider/Mary Hanbury

In some areas of the store, brands were clustered together, which was easy to shop …

source
Business Insider/Mary Hanbury

… and in some cases, there were multiple sizes in one style.

source
Business Insider/Mary Hanbury

But on the whole, it was pretty chaotic and lived up to the bargain-hunt promise.

source
Business Insider/Mary Hanbury

The clearance section was sprawling, and the clothing felt a lot less fashionable than at Nordstrom Rack.

source
Business Insider/Mary Hanbury

Both men’s and women’s wear included a section devoted to “Premium Designers,” where trendy brands such as Theory and Vince had their own mini-sections.

source
Business Insider/Mary Hanbury

More expensive items were boxed up in plastic to prevent shoplifting.

source
Business Insider/Mary Hanbury

This location was considerably larger than the Nordstrom Rack we had visited, which meant there was room for homeware and furniture.

source
Business Insider/Mary Hanbury

We found more popular brands here.

source
Business Insider/Mary Hanbury

Overall, the products felt much less exclusive than what we found at Nordstrom Rack.

source
Business Insider/Mary Hanbury

TJ Maxx is all about the bargain hunt.

source
Business Insider/Mary Hanbury

Overall: On paper, these stores appear to be identical, offering big discounts on designer labels. While a no-frills store layout is a factor in both, there is a big difference between the quality of the brands and, therefore, the prices.

At Nordstrom Rack, the focus is on more exclusive designer labels, which means it’s generally more expensive. At TJ Maxx, there is a wide mix of lesser-known labels, affordable designer brands such as Calvin Klein and Ralph Lauren, and a few “premium” labels scattered in between.

Overall, Nordstrom Rack was the winner. While it is expensive, you do feel that you are shopping for better-quality products.