Off-the-peg clothes are made in standard sizes and sold ready to wear. Nobody cut them to fit your body alone. You walk into a shop, find your size, and take them home. The opposite is made-to-measure or tailor-made, where a tailor makes the clothes for one person. Almost everything on a normal high-street rail is off-the-peg, even when it looks expensive. The phrase is everyday British English. In American English people more often say off-the-rack; same idea, different picture (a peg versus a rack in the shop). People sometimes stretch off-the-peg to other ready-made things, but its real home is clothes. It does not mean cheap by itself, and it does not mean badly made. A designer jacket can still be off-the-peg if it was sewn in standard sizes. It also does not mean second-hand. It only tells you the clothes were not built around your measurements.