Nordstrom results show Americans are hunting for discounts
Shoshy Ciment/Business Insider
- Nordstrom Rack's net sales increased 8.8% in the most recent quarter as consumers turned to discounts.
- Discount retailers have seen growth as Americans cut back on spending.
- This slowdown has slammed some areas of the retail sector.
Evidence is mounting that US shoppers are becoming more savvy about their purchases, and it looks like Nordstrom Rack is reaping the benefits.
The discount outlet and sister brand of the Seattle-based luxury department store — Nordstrom — saw an 8.8% increase in net sales in the most recent quarter on Tuesday, following on from strong results in the quarter before.
Meanwhile, its full-price sister chain saw net sales rise by under 1% in the most recent quarter.
These results come as Americans cut back on spending. From loyalty programs to deals and discounts, companies are finding ways to provide value for their customers.
This slowdown has slammed much of the retail sector.
In its most recent quarter, Amazon reported that shoppers had become more cautious, often choosing to trade for less expensive items where possible.
It's also been bleak for the fast-food and restaurant industry. McDonalds, KFC, and Starbucks all reported drops in comparable sales in the most recent quarter.
Executives have put the slump down to shoppers becoming more cost-conscious.
Whereas discount stores have continued to focus on offering good value for money, and this strategy has been working well.
TJX Companies, operator of T.J. Maxx, Marshalls, and HomeGoods, saw a 4% rise in same-store sales in the most recent quarter.
Walmart similarly reported strong results recently. The company raised its profit outlook, guiding for an increase of 6.5% and 8% in consolidated adjusted operating income, up from the 4% to 6% increase it previously expected.
The success of these stores is a bright spot for the industry.
Nordstrom is turning more efforts toward its off-price store, Nordstrom Rack.
The company has already opened 11 new stores this fiscal year and will be opening at least 21 more before fall 2025.