Dive Brief:

• Ross Stores Inc. will open four new Ross Dress stores in October, two in the Chicago area, one in Elkhart, IN, and one in East Largo, FL.The company is also opening four new DD’s Discount stores,  two in Texas, one in Yuma, AZ, and one in Miami.

• The discount retail company operates more than 1,400 off-price apparel and home fashion stores in 33 states, Washington, DC, and Guam.

• The growth comes as other retailers, some with higher-priced flagship brands, are also growing their discount operations.

Dive Insight:

Ross Stores Inc.’s aggressive growth is a sign of the health of the discount apparel and home goods space and a challenge for retailers like Macy’s, J.Crew, and others attempting to get into that game.

Macy’s has launched off-price Backstage stores, while Express, J.Crew, and Gap Inc. are growing their outlet “factory” stores. 

The increased competition will likely be felt everywhere in the space, and could also eat into retailers' higher-priced flagship brands.

Increasingly running outlet stores includes stocking merchandise that wouldn't pass muster at a retailer’s flagship locations. While many store-brand grocery-store and general-retail items in foods, health, and beauty are seen as good bargains because they’re of better quality these days, outlet stores seem to be heading in the opposite direction. 

And consumers may be becoming more aware of that discrepancy. Studies show that shoppers are increasingly looking for bargains at flagship stores, where sale prices often best outlet-store prices, on goods of higher quality.

“Increasingly [retailers] have endangered their underlying brand integrity with regard to price,” Mark Cohen, Columbia University business school professor of retail studies, told Retail Dive earlier this year. “These outlet stores are loaded with a mixed bag of stuff, a little bit of the real stuff, a lot of garbage. I believe in the wisdom of crowds — I believe customers in the aggregate get it.”