Ross Stores: A Case Study

In 2017, Ross Stores (ROS) made the retail news when it was described as the “Big Winner of Brick-and-Mortar Retail” in an article by The Motley Fool, August 2017 and as a shining “Diamond in Rough-And-Tumble Retail” in another article in Forbes’ October 2017 issue. According to the latter article, by preserving consistent profitability growth over the past decade and achieving the highest profitability among peers in 2017 (See Exhibits 1 and 2), ROS had proven to be a successful major player in a market where many competitors were fighting for survival. ROS executives suggested that their secret to success was their “great deal of purchasing power.” In fact, working directly with manufacturers to negotiate prices enabled ROS to offer customers discount prices on the best brands and latest styles. Along with that, a “no-frills” strategy was adopted to create more savings that were passed on to the consumers. With this model, ROS grew from a six-store chain into a $12.9 billion, Fortune 500 company. This growth was achieved not only by enlarging their brand Ross Dress for Less® but also by launching a new brand in 2004 called dd’s DISCOUNTS® with the same concept as the first brand. In 2017, Ross Dress for Less® had 1,412 stores in 37 states, the District of Columbia and Guam, and dd’s DISCOUNTS® had 215 stores in 16 states.

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