Consumers want value and they'll go to stores like TJX that offer them the best deal, Morgan Stanley retail analyst Kimberly Greenberger told CNBC Wednesday.
“We just came out of the holiday season with a very, very competitive mindset among retailers, and consumers really waited for those best deals,” she said. “The message from consumers is, ‘If you don’t have a great deal we’re not coming to your store.’ So we see 2012 as a year that will continue that theme.”
Unlike luxury retailers such as Saks, whose wealthy customers aren't likely shopping for discounts, customers at mid-priced stores like TJX’s , TJ Maxx are “flocking to value,” she added. “They’re gravitating to those retailers that offer the best value in the marketplace and TJX is certainly benefiting from that trend.”
TJX reported an increase in earnings earlier Wednesday on strong holiday sales.
“They had a really solid quarter, with a 7 percent increase in same-store sales,” the analyst said, with February looking strong so far as well.
One area where competition isn’t as strong — intimate apparel, and that’s why Greenberger’s top retail pick is Limited Brands, whose stores include Victoria’s Secret.
“Victoria’s Secret has done a great job of shortening its supply chain” to give customers the products for which they clamor, Greenberger said. Limited Brands reports earnings Thursday.
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Neither Kimberly Greenberger nor Morgan Stanley own shares of TJX and Limited, but Morgan Stanley has an investment banking relationship with the companies and makes a market in their stocks.