How T.J. Maxx's polarizing food aisle lures shoppers into spending more
- Some shoppers are skeptical about T.J. Maxx's food aisle and whether the products are good quality.
- But T.J. Maxx works with smaller food vendors you might not have heard of before.
- Its food aisle is part of a strategy to broaden its range beyond apparel and get shoppers to spend more.
The internet doesn't know what to make of T.J. Maxx's food aisle.
On TikTok, content creators are divided about whether to buy food from the retailer, best known for its discount apparel. Some question whether the food is good quality and within date, while others say it's value for money and they can try new and unusual products.
"The T.K. Maxx food aisles fills me with literal terror," one viral TikTok said, using the retailer's UK brand name. Another said that the food had an "ominous energy."
"It does weird me out," another TikToker said. "I'm very curious as to why they have brands I've never seen in my life."
But T.J. Maxx's food range enables the retailer to encourage more incremental purchasing from shoppers who come in to buy jeans or a new handbag and leave with some food topping up their spending.
It's also part of its strategy to diversify its product range and become more of a general gifting destination.
T.J. Maxx sources from vendors you've probably never heard of
Go to your local T.J. Maxx and chances are you'll find an aisle lined with pink Himalayan salt grinders, bottles of coffee syrup, and boxes of gourmet chocolates.
T.J. Maxx has been selling food for more than a decade, according to Aneesha Sherman, an analyst at Bernstein. She said that the retailer had applied the same strategy it uses for clothing to items like toys, homeware, and food — selling excess stock that suppliers are struggling to shift.
Sherman said that T.J. Maxx had expanded from apparel to any inventory that's available to buy at super lower prices, which it can then resell to customers at a discount while still making a profit. The food items it sells also likely have higher margins than its cheapest apparel, she added.
At the start of its food business, T.J. Maxx would buy discounted products within three months of expiration that other food sellers were put off by, Sherman said.
T.J. Maxx doesn't sell fresh food, meaning the retailer doesn't have to worry about getting frequent deliveries from suppliers and short expiry dates. Sherman said T.J. Maxx started out selling items like sauces, teas, and condiments but now focuses more on foreign, gourmet, and gifting foods, she said.
This fits neatly into the company's brand strategy, she said, which is to evolve into more of a general gifting and value destination with a focus on the "treasure hunt" and items you won't find elsewhere.
"They're not just looking for big brands anymore, they're looking for hard-to-find niche things where they are literally the biggest client," she said.
"One of the things that makes them unique is they have buyers in 12 different markets," Sherman continued, adding that T.J. Maxx sources many of its products from small European vendors.
"They have buyers in Spain who can find a set of little Spanish olives that they can then export out," she said.
Fiona Fitzpatrick, a consumer packaged goods consultant who hosts the podcast "Brand Growth Heroes," told BI that shoppers have a "different pot of money" in their mind for buying food.
Speaking about T.K. Maxx, the British arm of the company, Fitzpatrick said that customers may visit its stores with a budget for clothes, but end up spending more than this in total because they associate their spending on food at the store with a different pot of money.
For Fitzpatrick, T.K. Maxx's food is an "unplanned extra" that catches her eye on the way to the checkouts, she said.
"I often buy my husband some weird and wonderful crisps on my way to the till, or some Italian amaretti that look far more authentic than something I can pick up in a supermarket," she added.
Fitzpatrick said that customers are unlikely to compare the prices of the food they buy from T.K. Maxx with what they'd pay at grocery stores.
"The shopper compares the price to what they've just spent on clothing or household goods, rather than comparing them to another [similar] product," she said. "As a result, they seem like a little bit of luxury for a steal."
T.J. Maxx doesn't sell out-of-date food
Sherman brushed off concerns that some TikTok users have about the retailer selling expired or poor-quality foods: People just don't trust the brands as much because they're unfamiliar, she said.
"There is probably a brand recognition issue because by definition, if they're buying niche products from brands you've never heard of, the value is you can't get it anywhere else," she said. "But the downside is you've never heard of the brand. So it goes hand in hand."
"The brandedness that was so inherent to the apparel purchase is becoming less of a factor, and it's more about just quality and value," Sherman continued.
"I think it's a matter of time as people try the foods and realize that their quality is actually pretty good and there isn't an expiration date issue, the trust in that category will probably grow over time," she said.
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