More shoppers head to discount stores

And after shopping at T.J. Maxx regularly, Chandler, a college admissions counselor, thinks the off-price retailer "has a fair selection of brands and offerings and is very reasonable on price. I now save department-store shopping or brand-name store shopping for specific pieces that I know work, (like) jeans from a specific chain or a pair of shoes I know I love."

Wal-Mart is probably even better positioned than the off-price retailers because it doesn't rely so much on discretionary fashion and home furnishings. Rather, it's the largely recession-proof staples — food, health and beauty aids, cleaning products and other home essentials — that draw mobs to Wal-Mart.

Another discounter, Ross Dress for Less, thinks its customers fall into two groups: those who "want a bargain" and those who "need a bargain," says Katie Loughnot, Ross' vice president of investor relations.

"We do attract a 'trade-down' customer who is not spending as much as they were," Loughnot says. "We also attract people who aspire to wear a brand but couldn't afford to get it at a better department store."

Though Loughnot says many variables affect consumer spending, she thinks that when the economy suffers, Ross outperforms full-price stores because "we are very value-focused. Name-brand bargains will always be in style."

Pondering every purchase

Many of the gifts under the Christmas tree last year from Laura Arnold's husband were from Ross, which is new to her area in Midlothian, Va. Arnold did most of her gift-card shopping at Wal-Mart, because she knew the money would "stretch further."

The couple, who are trying to pay off credit card debt, have boosted the portion of shopping that they do at discount stores from about 50% to about 80%. That's likely to continue because she says they're "trying to go several months with only absolutely necessary purchases."

Many people will drive farther or brave bigger crowds to shop at Wal-Mart. Still, some of them aren't quite willing to make the leap to buy their clothes there. Wal-Mart's efforts to snare clothing shoppers from competitors, especially Target, have foundered in the past few years, along with its efforts to market "designer" clothing.

Still, for Erica Leydic of Atlanta, Wal-Mart clothes are a source of pride. She's been a discount shopper for years. "I love the thrill of the hunt," she says. "Plus, I think it's great when girls comment on my great outfit, and I say, 'Wal-Mart — $5.00.' "

At discounters such as Marshalls and Ross, some shoppers prefer not to face the scattershot selection, despite the brand names. Chrystal Johnson Roesle of Birmingham, Ala., says shopping at off-price retailers is still "just not worth the hassle."

Linda Totten of Cary, N.C., says she's been to T.J. Maxx only two or three times because she says it's too challenging to find her size. She prefers sales at Dillard's dds or online shopping at Coldwater Creek cwtr, where there are 70%-off deals and more to choose from.

There are other challenges for off-price stores.

"At the end of the day, (off-price stores) are still fashion retailers, and (people) may not buy just because it's a good price," says retail analyst Stein of Stein Research in Cleveland.

But Kimberly Washington says off-price retailers are the best solution for her family these days.

"I spend so much time in the car transporting my children that the money that might ordinarily be spent elsewhere on clothing goes to gasoline," she says. "With all of the negative news about the economy, you just never know what might happen, (so) we try to save money and not spend more than we have to on anything."

TELL US: Have you changed your shopping habits because of the economic slowdown?

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