One of the key attributes of Ross Stores’ approach to growth is its careful site selection process. The company reviews a great many site locations each year in order to select the best opportunities. The goal is for all selected sites to have a minimum number of key attributes before investing in expansion.
“We look for solid real estate fundamentals, including access, visibility, traffic counts, and a strong mix of co-tenants, all supported by our targeted demographics,” Fassio says.
At the same time that the company attempts to manage real estate growth to maintain dominance or achieve parity with the competition in key markets, it is also working to ensure that all locations provide a convenient, accessible shopping experience for its customers. Ross Stores works to understand the pluses and minuses of any particular market and then evaluates opportunities for each new store before deciding where to open a location.
One of the ongoing challenges for Ross Stores has been the availability of acceptable site locations, which has been seriously curtailed in the last few years. During the recession, new shopping center development came to a halt. Since then, acceptable sites have come largely from store closings by other retailers.
Fortunately, the organization has been able to demonstrate success by transforming other retailers’ space to fit its own needs. Ross Stores has developed a flexible store model that allows it to adapt many types, shapes and sizes of buildings to suit its footprint. This ability to adapt its stores to suit various locations has allowed the company to build a footprint of stores that operates everywhere from traditional strip centers and freeway-oriented power centers to enclosed regional malls and free-standing buildings.
“Our store layout has a high degree of flexibility,” Fassio says. “As long as the core real estate fundamentals are in place it allows us to offer our customers a convenient and enjoyable shopping experience, once complete, then the treasure hunt is on.”
Ross Stores continues to look for ways to enhance its property development operations. For example, it has a self-developed, proprietary software package for developing and maintaining its new and existing store portfolio. It streamlines and organizes processes, as well as cuts down on time spent searching for information or answers contained in separate files or separate resources.
The company also recently purchased a Dublin corporate campus and New York buying office, developed two new distribution centers and a data center, and engaged in a number of ongoing updating and refurbishment efforts throughout its store network.
“The Dublin corporate campus and New York buying office were both unique purchases to ensure there would be a single long-term location to maximize the cohesiveness and effectiveness of work space for our associates,” Fassio says. “Both of these purchases allow us to meet our current and future office growth needs.”
The new distribution and data centers were necessary for the company to keep up with its growth and IT security needs. “We are also constantly updating and refreshing the store network to maintain a clean, inviting store environment for our customers,” Fassio says.
As the company continues its efforts to expand, it is fortunate that it has strong, committed and loyal relationships with developers, landlords, retail brokers, transaction attorneys, architects, key vendors and contractors. This is thanks to a steady growth program for more than 30 years, which has provided the company with the ability to develop and maintain lasting relationships.
Ross Stores will continue to place a great deal of emphasis on preparation, execution and being a strong merchant and buying organization. The company understands that good fortune tends to come to those that are the most prepared and able to execute. Investing in a strong merchant and buying organization is the key to increasing its access to the best name-brand bargains available in the marketplace. “This is our top priority and the core strategy of our off-price business,” Fassio says.
In addition, Ross Stores recognizes that it will be important for its property development team to maintain its discipline and standards in acquiring the best sites possible for new and relocated stores. This will allow the company to grow Ross Dress for Less to 2,000 locations while also growing its dd’s DISCOUNTS subsidiary to a chain of 500 stores.
“To maximize sales and profits over the near and long-term, we take a very disciplined approach to expense control across all areas of our businesses,” Fassio says. “That said, the biggest challenge for our company is ensuring consistent execution of our off-price strategies across all areas of our business, from our merchandising organization and supply chain to IT, other back office functions and our stores. All areas are important in ensuring that we can deliver the bargains our customers expect and keep them coming back for more.”