Off-Price Retailer Ross Looks To Open 100 New Stores This Year
Off-price retailer Ross Stores aims to open about 100 locations this year, having already debuted 19 new stores in February and March, as retailers who appeal to financially pinched shoppers grab an opportunity to grow.
The Dublin, California-based chain said on Monday it had opened 11 Ross Dress for Less stores and eight dd's Discounts stores in 13 states during last month and this month. Both chains expanded into existing markets, including locations in California, Texas, and Florida, according to Ross. And for dd's, that growth also included its first store in Wisconsin, the retailer said.
Those new locations are part of Ross's plan to add roughly 100 new stores, including about 75 Ross and 25 dd's stores, during fiscal 2023, according to the retailer. Ross still has its sights set on having as many as 3,600 stores total for both chains, a goal it discussed last year.
Several retailers that offer bargains to shoppers, off-price sellers and discount chains, are considered to be in a good growth position during an era of high inflation, where even middle and higher-income consumers are being careful about their spending. As a result, off-price retailers, such as giant TJX Cos. — the owner of T.J. Maxx and Marshalls — and Burlington Stores have continued to increase their brick-and-mortar footprints. TJX recently announced it plans to open about 150 new stores this year. And discount retail giant Dollar Tree will be revving up its new store openings this year, planning as many as 650.
Off-price retailers such as Ross sell branded or designer items to consumers at much lower prices than traditional stores. Discount chains like Walmart and Target offer standard merchandise to consumers at low prices. Both kinds of retailers say they have a competitive edge in a lengthy high-inflation period when shoppers are financially pinched. But even some of those lower-priced retailers are having a bit of a tough go of it as consumers pull back their spending on discretionary goods like apparel.
Expansion Despite Headwinds
Last month Ross reported its fiscal fourth-quarter earnings and said sales were $5.2 billion, an increase from $5 billion in the prior-year period, with comparable store sales up 1% on top of a 9% increase for the same period in 2021. However, for 2022 overall sales were down, to $18.7 billion compared with $18.9 billion in fiscal 2021, with comparable store sales down 4%, versus a 13% increase in the prior year.
Last week Target reported only modest total comparable sales growth of roughly 1% in the fourth quarter, with comparable-stores growth of 1.9% and a comparable digital sales decline of 3.6%. Total revenue was $31.4 billion for the period ending Jan. 28, up 1.3% from the prior year.
Ross is expanding despite the economic headwinds that Walmart, Target and even Macy's have predicted this year.
"These recent openings reflect our ongoing plans to continue the expansion of our two chains," Gregg McGillis, Ross group executive vice president, property development, said in a statement. "We now operate a total of 2,034 Ross Dress for Less and dd's Discounts locations across 40 states, the District of Columbia, and Guam. As we look out over the long term, we remain confident that Ross can grow to 2,900 locations and dd's Discounts can become a chain of 700 stores given consumers' ongoing focus on value and convenience."
Ross currently has 1,704 Ross Dress for Less locations and 330 dd's stores, which offer feature a more moderately priced assortment of apparel than the namesake chain.
Elgin Development Group
Linda Moss, CoStar
- March 07, 2023