Ross to open another 100 new stores this year

Dive Brief:

Ross Stores on Monday said it will open another 100 or so new stores — 75 Ross Dress for Less locations plus 25 dd's Discounts — this fiscal year.
To that end, the off-pricer in February and March opened 19 Ross and seven dd's stores across nine states, according to a company press release.
The brick-and-mortar strategy is a repeat of the past two years; last year the company opened 98 stores. Ross now operates 1,831 stores across 39 states, the District of Columbia and Guam, per the release.

Dive Insight:

Ross is staking its growth squarely on the ground, quite literally.

The off-price retailer has shunned e-commerce as too expensive for its moderate price point, a playbook that rival Burlington also articulated just last week. In Burlington's case, the company tried and is now abandoning online sales, in favor of opening more than 50 stores during its fiscal year.

Ross, by contrast, hasn't ventured online. In a statement, Ross Group Executive Vice President of property development Gregg McGillis said the company remains "confident that Ross can grow to 2,400 locations and dd's DISCOUNTS can become a chain of 600 stores given consumers' ongoing focus on value."

The newest openings make good on the company's plans to expand "in both existing and newer markets, including the Midwest for Ross, and expansion of dd's DISCOUNTS into Indiana," he also said.

It's that value proposition that makes e-commerce so untenable, according to comments by Ross COO Michael Hartshorn to analysts last year. "We think that the moderate off price business, which is what we're in would not work in an online environment with a $10 to $11 [average unit retail]," he said, per a Motley Fool transcript, noting that "the economics with free shipping and returns are just not financially sustainable and we don't see any way that business would be accretive to our profit."

The rationale is backed up by solid footfall numbers as crunched by store traffic analytics firm Placer.ai, which found that, during the past holiday season, Ross enjoyed 12.5% year-over-year traffic growth, the best among the retailers the firm analyzed. Ross also took first in loyalty, with just under 2.2 repeat visits per quarter, "with the rest of the off-price sector not far behind," according to the report.