TJ Maxx 2015 Annual Report Download - page 21

Our expansive vendor universe, which is in excess of 18,000, consists primarily of manufacturers along with
retailers and other vendors, and provides us substantial and diversified access to merchandise. We have not
experienced difficulty in obtaining sufficient quality merchandise for our business in either favorable or difficult
retail environments and expect this will continue as we continue to grow. We believe a number of factors provide
us excellent access on an ongoing basis to leading branded merchandise and make us an attractive channel for
many vendors in the market. We are typically willing to purchase less-than-full assortments of items, styles and
sizes as well as quantities ranging from small to very large; we are able to disperse merchandise across our
geographically diverse network of stores and to target specific markets; we pay promptly; we generally do not
ask for typical retail concessions (such as advertising, promotional and markdown allowances), delivery
concessions (such as drop shipments to stores or delayed deliveries) or return privileges; and we have financial
strength and an excellent credit rating.
Inventory Management. We offer our customers a rapidly changing selection of merchandise to create a
treasure hunt experience in our stores and to spur frequent customer visits. To achieve this, we seek to turn the
inventory in our stores rapidly, regularly offering fresh selections of apparel and home fashions at excellent
values. Our specialized inventory planning, purchasing, monitoring and markdown systems, coupled with
distribution center storage, processing, handling and shipping systems, enable us to tailor the merchandise in
our stores to local preferences and demographics, achieve rapid in-store inventory turnover on a vast array of
products and generally sell within the period we planned. We make pricing and markdown decisions and store
inventory replenishment determinations centrally, using information provided by specialized computer systems
designed to move inventory through our stores in a timely and disciplined manner. Over the past several years,
we have been investing in our supply chain with the goal of continuing to operate with low inventory levels, to
ship more efficiently and quickly and to more precisely and effectively allocate merchandise to each store.
Pricing. Our mission is to offer quality, fashionable, brand name and designer merchandise in our stores
with retail prices that are generally 20% to 60% below department and specialty store regular retail prices on
comparable merchandise, every day. We do not generally engage in promotional pricing activity such as sales or
coupons. We have generally been able to react to price fluctuations in the wholesale market to maintain our
pricing gap relative to prices offered by traditional retailers as well as our merchandise margins through various
economic cycles.
Low Cost Operations. We operate with a low cost structure compared to many traditional retailers. We
focus aggressively on expenses throughout our business. Our advertising is generally focused on promoting our
retail banners rather than individual products, including at times promoting multiple banners together, which
contributes to our advertising budget (as a percentage of sales) remaining low compared to many traditional
retailers. We design our stores to provide a pleasant, convenient shopping environment but, relative to other
retailers, do not spend heavily on store fixtures. Additionally, our distribution network is designed to run cost
effectively.
Customer Service/Shopping Experience. We continue to renovate and upgrade our stores across our
retail banners to enhance our customers’ shopping experience and help drive sales. Although we offer a self-
service format, we train our store Associates to provide friendly and helpful customer service and seek to staff
our stores to deliver a positive shopping experience. We typically offer customer-friendly return policies. We
accept a variety of payment methods including cash, credit cards and debit cards. We also offer TJX-branded
credit cards in the U.S. through a bank, but do not own the customer receivables.
Distribution. We operate distribution centers encompassing approximately 14 million square feet in six
countries. These centers are generally large, highly automated and built to suit our specific, off-price business
model. We ship substantially all of our merchandise to our stores through these distribution centers as well as
warehouses and shipping centers operated by third parties.
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