Off-Price Retailer Ups Its Former Goal by 20%
Ross Stores is the latest off-price retailer to make plans to vastly increase its brick-and-mortar footprint, saying it now aims to have as many as 3,600 stores as Americans hunt for bargains at a time when shoppers have fewer options than before.
Ross, based in Dublin, California, raised its target for long-term store-growth potential on Tuesday. The company, which bills itself as the largest off-price retailer in the nation, has “substantial runway for expansion relative to our year-end store count of 1,923 locations,” CEO Barbara Rentler told Wall Street analysts during a fiscal fourth-quarter earnings call.
Burlington Stores and TJX Cos., parent of discount chains such as T.J. Maxx and Marshalls, have both been in expansion mode for the same reasons that Ross cited. They see opportunities to increase market share following the contractions the retail industry underwent in 2019 with a series of Chapter 11 filings and liquidations, and the strain of the pandemic as it peaked in 2020.
“Given consumers’ increased focus on value and convenience, we have seen favorable sales trends in both our new and infill market stores. ... We operate in an attractive sector of retail and our mission continues to be delivering the best bargains possible to leverage our favorable market position,” Rentler said.
Ross Stores owns two chains, Ross Dress for Less, with 1,629 stores, and dd’s Discounts, with 295 stores.
“Along with the large number of retail closures and bankruptcies over the last several years, we now believe that Ross Dress for Less can expand to about 2,900 locations, up from our prior target of 2,400, and that dd’s Discounts can eventually become a chain of approximately 700 stores, versus our previous projection of 600,” Rentler said, adding that represents an overall 20% increase over its prior forecast, raising it to 3,600 stores.
Ross isn’t the only off-price retailer opening up lots of stores.
Last week Framingham, Massachusetts-based TJX said it planned to add 1,600 overall new stores in the long term. Its various chains have 4,689 stores, but the retailer is now looking to increase that base to 6,275. And Burlington Stores, based in Burlington, New Jersey, a year ago said it planned to increase its store fleet to 2,000 sites long term, double the original goal of 1,000.
For the quarter ending Jan. 29, Ross posted sales of $5 billion, with comparable store sales up 9% versus the same period in 2019, while for the full fiscal year total sales rose 8% to $18.9 billion, up from $16 billion in fiscal 2019, with comparable store sales up 13%.
For 2022, the retailer expects to debut 100 new locations, including 75 Ross stores and 25 dd’s Discounts stores, while closing 10 older stores, according to Chief Financial Officer Adam Orvos. For the first quarter, Ross expects to add 30 new stores, with 22 of them Ross locations and eight dd’s Discounts, he said.