Ross Stores is on an off-price roll
While some retailers are running into hurdles in the new economy, off-price retailer Ross is thriving, and is intent on becoming an even bigger force in the world of discount retail.
In June and July alone, Ross opened multiple stores from two different concepts — 22 locations of its apparel concept Ross Dress for Less across 12 states and eight new locations of dd’s DISCOUNTS, its home goods chain, according to Retail Leader. Ross plans to continue building its presence with both concepts, increasing its Dress for Less current store count from 1,651 to 2,000 locations and dd’s DISCOUNTS chain to 500 stores.
The resurgence in off-price retail began in the wake of the last economic downturn and has continued since. TJX has experienced huge success with its treasure hunt-oriented T.J. Maxx and expanded its portfolio to include more than one home goods chain, introducing Homesense last year in addition to its existing HomeGoods.
Ross may be TJX’s most significant competitor. The Motley Fool reports that Ross has outgrown TJX consistently over a three-year span. The retailer has been in business since 1982, but this decade began expanding aggressively into previously unexplored markets, like the Midwest where it now has 149 locations.
The number of discount competitors has grown in recent years, with mainstream retailers such as Macy’s launching their own off-price concepts. Macy’s, which initially launched its off-price Backstage business as a standalone concept, has since begun opening branded shops within its full assortment department stores.
Even thrift store chain Goodwill has experienced an influx of popularity, which led to a perceived move upmarket and necessitated the creation of a new down-market concept, Simply Goodwill, for ultra-discount shoppers.
It’s unlikely that Ross will consider an upmarket move to differentiate as it enters new territory. The company’s shift away from its off-price roots was a notable failure in the late eighties and early nineties. That led the company to develop a strategy that it has stuck to up to the present day.
- Ross defines off-price success – Retail Leader
- Better Buy: TJX Companies vs. Ross Stores – The Motley Fool
- Overview: Historical Highlights – Ross Stores
- Goodwill finds the need to spin off a down market concept – RetailWire
- Will TJX’s Homesense repeat the success of HomeGoods? – RetailWire
- Is Macy’s heading for a rebound? – RetailWire
DISCUSSION QUESTIONS: Do you see Ross Stores becoming a force in off-price retail similar to TJX Companies? Should Ross concentrate on taking share from non-discount competitors or be primarily concerned with competing against Marshalls, T.J. Maxx, HomeGoods, etc.?