Ross 2011 Annual Report Download - page 14

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Pricing. Our policy is to sell brand name merchandise at Ross that is priced 20% to 60% below most department and specialty
store regular prices. At dd’s DISCOUNTS, we sell more moderate brand name product and fashions that are priced 20% to 70%
below most moderate department and discount store regular prices. Our pricing policy is reflected on the price tag displaying our
selling price as well as the comparable selling price for that item in department and specialty stores for Ross merchandise, or in
more moderate department and discount stores for dd’s DISCOUNTS merchandise.
Our pricing strategy at Ross differs from that of a department or specialty store. We purchase our merchandise at lower prices
and mark it up less than a department or specialty store. This strategy enables us to offer customers consistently low prices. On
a weekly basis our buyers review specified departments in our stores for possible markdowns based on the rate of sale as well
as at the end of fashion seasons to promote faster turnover of merchandise inventory and to accelerate the flow of fresh product.
A similar pricing strategy is in place at dd’s DISCOUNTS where prices are compared to those in moderate department and
discount stores.
Stores
At January 28, 2012, we operated a total of 1,125 stores comprised of 1,037 Ross stores and 88 dd’s DISCOUNTS stores. Our
stores are located predominantly in community and neighborhood shopping centers in heavily populated urban and suburban
areas. Where the size of the market and real estate opportunities permit, we cluster Ross stores to benefit from economies of
scale in advertising, distribution, and field management. We do the same for dd’s DISCOUNTS stores.
We believe a key element of our success is our organized, attractive, easy-to-shop, in-store environments at both Ross and
dd’s DISCOUNTS, which allow customers to shop at their own pace. While our stores promote a self-service, treasure hunt
shopping experience, the layouts are designed to promote customer convenience in their merchandise presentation, dressing
rooms, checkout, and merchandise return areas. Our store’s sales area is based on a prototype single floor design with a
racetrack aisle layout. A customer can locate desired departments by signs displayed just below the ceiling of each department.
We enable our customers to select among sizes and prices through prominent category and sizing markers. At most stores,
shopping carts are available at the entrance for customer convenience. Cash registers are primarily located at store exits for
customer ease and efficient staffing.
We use point-of-sale (“POS”) hardware and software systems in all stores, which minimizes transaction time for the customer at
the checkout counter by electronically scanning each ticket at the point of sale and authorizing personal checks, debit, credit,
and electronic gift cards in a matter of seconds. For Ross and dd’s DISCOUNTS combined, approximately 60% and 58% of
payments in fiscal 2011 and fiscal 2010, respectively, were made with credit cards and debit cards. We provide cash, credit
card, and debit card refunds on all merchandise (not used, worn, or altered) returned with a receipt within 30 days. Merchandise
returns having a receipt older than 30 days are exchanged or refunded with store credit.
Operating Costs
Consistent with the other aspects of our business strategy, we strive to keep operating costs as low as possible. Among the
factors which have enabled us to do this are: labor costs that are generally lower than full-price department and specialty stores
due to a store design that creates a self-service retail format and due to the utilization of labor saving technologies; economies
of scale with respect to general and administrative costs resulting from centralized merchandising, marketing, and purchasing
decisions; and flexible store layout criteria which facilitate conversion of existing buildings to our formats.
Information Systems
We continue to invest in new information systems and technology to provide a platform for growth over the next several years.
Recent initiatives include enhancements to our Merchandise Planning, Core Merchandising, and Allocation systems. These
initiatives support our entry into new markets and our assortment execution and plan achievement, while also supporting future
growth. In addition, we made improvements to our networks and our point-of-sale systems to increase reliability and speed and
are also upgrading our store wireless network.