Burlington Stores Optimistic as High Earners Become More Cost Conscious

It’s an off-price retailer’s market. While large department stores ranging from Nordstrom to Kohl’s are struggling to find their footing, off-price retailers such as Burlington Stores are finding an opportunity to shine.

PYMNTS research shows that nearly 70% of retail consumers expect significant price increases in the next 12 months, and nearly half are willing to leave their favorite brand for a less expensive competitor.

With the majority of consumers foreseeing significant increases and hunting for price bargains, Burlington Stores is seeing an opportunity to strengthen its business with the planned opening of 500 to 600 new stores over the next five years — an effort that it hopes will help attract bargain hunters.

The retailer’s planned expansion comes at a time when a large number of its competitors, especially department stores, are shrinking their physical footprint. Macy’s, for example, plans to shut 125 stores over the next three years, while Gap plans to shut nearly 350 by the end of 2023. Overall, more than a dozen retailers plan to shutter at least 800 stores this year.

“We expect that many traditional retailers may struggle,” said Michael O’Sullivan, CEO and director at Burlington Stores.

In addition to adding new store locations to its roster, the retailer is also planning to build stronger relationships with its suppliers, refining its merchandising process and sourcing excess inventory from other retailers, many of whom are shutting stores.

Inside its stores, it plans to focus on more efficient organization, with the goal of building a new store prototype — all to better position itself among its peers as a prominent off-price retailer.

That said, it sees its investment in improving supplier relationships as the most important effort in driving long-term growth. The company believes that with help from suppliers, it has a strong potential to increase inventory volumes across its physical footprint, which may lead to greater profits and business expansion for both parties. And with Burlington’s focus on merchandising capabilities and store organization, suppliers can expect a more efficient and streamlined partnership, leading to better collaboration and communication.

Ultimately, the Burlington, New Jersey-based company hopes to win the loyalty of consumers that are focused on finding the best value for their money in a challenging economic environment.

According to PYMNTS’ Consumer Inflation Sentiment study, “The False Appeal of Deal-Chasing Consumers,” half of consumers say finding better deals has become a much more important, if not the most important, factor when choosing where to shop.

Looking beyond 2023, Burlington Stores is optimistic about the potential for significant growth in sales, earnings and shareholder value. By leveraging its strengths in off-price retail and continuing to invest in its business, the company is bullish in its ability to maintain its position as a leading off-price retailer and drive long-term value for its stakeholders.

“We believe that the next few years could present significant opportunities to drive improved results. We are pushing ahead with the transformation of Burlington into a stronger off-price retailer, so we can take advantage of these opportunities,” O’Sullivan said.