Ross 2015 Annual Report Download - page 16

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At the end of fiscal 2015, we had approximately 730 merchants for Ross and dd’s DISCOUNTS combined. The Ross and
dd’s DISCOUNTS buying organizations are separate and distinct, and each includes merchandise management, buyers, and
assistant buyers. Ross and dd’s DISCOUNTS buyers have on average eight years of experience, including merchandising
positions with other retailers such as Bloomingdale's, Burlington Stores, Foot Locker, Kohl’s, Loehmann’s, Lord & Taylor,
Macy's, Nordstrom, Saks, and TJX. We expect to continue to make additional targeted investments in our merchant
organization to further develop our relationships with an expanding number of manufacturers and vendors. Our ongoing
objective is to strengthen our ability to procure the most desirable brands and fashions at competitive discounts.
The off-price buying strategies utilized by our experienced team of merchants enable us to purchase Ross merchandise at
net prices that are lower than prices paid by department and specialty stores, and to purchase dd’s DISCOUNTS
merchandise at net prices that are lower than prices paid by moderate department and discount stores.
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 value 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 and compelling value. 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
As of January 30, 2016, we operated a total of 1,446 stores comprised of 1,274 Ross stores and 172 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 at both Ross and dd’s DISCOUNTS is our organized, attractive, easy-to-shop, in-
store environments 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 enhance 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 and/or baskets are available at the entrance for customer convenience. Cash registers are
primarily located at store exits for customer ease and efficient staffing.
We accept a variety of payment methods. We provide 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.