Our contract with our customers is to provide a rapidly changing assortment of brand name merchandise at prices substantially lower than regular department and specialty store prices, every day. This contract embodies the major way in which our off-price concept differs from more typical retailing formats. We do not promise our customers a particular item in every size and color. Rather, we react to market opportunities and take advantage of the best buys, where we believe we can offer the most compelling values.

Keeping our off-price contract requires that we execute many areas of our business in very different ways than do typical retailers. One of the greatest differences lies in our opportunistic buying. Off-price buying is an art. It requires a savvy team of experienced buyers who are always aware of market dynamics. Traditional retailers must make buying decisions far in advance of the time the goods will appear on the selling floor. At TJX, buyers are in the marketplace every week and buy very close to need so that we can buy smarter and offer better values. Also, our ability to negotiate favorable terms with our vendors offers us the ability to pass great value to our customers.

Because our selections change so rapidly, we must have inventory management systems, distribution centers and store layouts that can accommodate this strategy. Thus, our sophisticated inventory systems facilitate the planning, allocation and replenishment of an average of nearly 12,000 units to each store per week. Our distribution centers are equipped to receive, process and ship huge amounts of goods very quickly. Our store layouts are extremely flexible, allowing us to shift our merchandising focus through brand names or merchandise categories.

Maintaining a low cost structure is another central way in which we differ from traditional retailers. We do not spend large sums on plush store fixturing or advertising. Our mission is to provide a pleasant, easy shopping environment with great emphasis on customer convenience. Relative to other retailers, our advertising budget as a percent of sales is quite low. Further, costs are contained throughout the Company which enables us to pass greater values on to our customers profitably.