Dive Brief:

• Off-price and outlet stores often don’t beat the promotional prices at their own regular retail counterparts, according to a study from market research company Haynes and Company, the Wall Street Journal reports.

• Haynes and Company researchers found American Eagle regular stores selling jeans for 20% less than at its outlets, that the least expensive sweater was at Ann Taylor stores and not at its outlets, and that the Gap flagship stores at Christmastime sold nothing at full price.

• Another study, by Citi Retail Services, found that a third of consumers who once shopped only at outlet stores now also shop for deals at regular retail stores, and in other research discovered that shoppers are spending less at outlet stores, with many saying better prices could be found in regular retail.

Dive Insight:

It’s already been documented that many retailers are stocking their outlet stores with specially-made, lower-quality merchandise that wouldn’t pass muster at their regular stores — something that could endanger their brand. 

Now add to that the fact that outlet stores are failing in many cases to beat flagship stores on price, and outlets and off-price stores seem even more problematic. And although off-price stores seem to be booming in recent years, there are signs that there are limits to the approach. When price and quality — the two key determinants of value — don’t satisfy customers, they’ll eventually go elsewhere, including back to the regular store.

“Increasingly [retailers] have endangered their underlying brand integrity with regard to price,” Mark Cohen, Columbia University business school professor of retail studies, told Retail Dive. “These outlet stores are loaded with a mixed bag of stuff, a little bit of the real stuff, a lot of garbage. I believe in the wisdom of crowds — I believe customers in the aggregate get it.”