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tjx-sales-not-affected-by-breach

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Continuing the discussion about Brand Damage,breach costs and The PCI security standards, TJX reported higher sales despite suffering the largest breach known. Same store sales increased 6%, higher than analysts expected. Consumer sentiment seem to confirm my contention that information security is not a key element of the TJX brand:

``It's a sad thing, but it can happen anywhere,'' said Chamia Kissoon, a 30-year-old bank employee from Boston who left with a bag filled with clothing.

``Identity theft and data theft seem endemic, and I've got to presume that since TJX is aware of this theft, that they've fixed their problem here,'' said Peter Hartzel, a 60-year-old financial manager from Dedham, Mass.

An expert who helps corporate clients repair their reputations said he was not surprised by TJX's strong sales amid bad publicity.

``Convenience and price are huge factors in bringing people to any store,'' said Peter Morrissey, an associate professor of communications at Boston University who helped advise Johnson & Johnson after product tampering in 1982 involving its medication Tylenol. ``It's just hard to change people's patterns.''

``And with something as mysterious as a data breach, it seems to be remote, and beyond people's control, so customers cut you a fair amount of slack,'' Morrissey said. ``It's almost like white noise.''

It will be interesting to see how their stock performs. I think it will do well, because investors will realize that this is a one-time event that will not adversely affect long-term cash-flow:

``Wall Street is very focused on their operating performance, and on how this credit card issue is something that will be corrected, and then it will be history,'' said Mark Montagna, an industry analyst with C.L. King & Associates.

As for customers, Patrick McKeever, an analyst with Avondale Partners, said surveys that he and others in his firm have conducted with TJX shoppers indicate that any consumer backlash will be negligible.

``There were certainly a few people who had heard about it on the news and decided to curtail their shopping at TJX, but for the most part, people seemed not to be overly concerned about it,'' McKeever said. ``Consumers are well aware of the kind of value TJX offers because you can go and see the same merchandise you would see in department stores, and it's 20 to 60 percent cheaper. It's very compelling at the end of the day.''

For consumers, the benefit of the savings is worth the risk of having their credit card data stolen. It certainly seems rational, given that they assume it could happen anywhere and that it probably will.

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