People come to shop at the new Ross Store at 600 East Valley Avenue. (Jason Almond/Los Angeles Times)
As shopping malls and department stores close, affordable chains like Ross Dress for Less are opening new stores.
Economic anxiety and inflation lead shoppers to spend less and seek savings. In this hard-hit retail environment, some chains are thriving and opening new stores.
Liz Lopez shopped for a designer wallet at Rose’s new store in Alhambra. She is a big fan of the Dublin-based chain and is delighted there is now one just 10 blocks from her home.
People check out after shopping at the new Ross store. (Jason Almond/Los Angeles Times)
“I came on Tuesday to take advantage of the senior discount,” Lopez said, showing off her new black Dolce & Gabbana purse. “I always find a good deal.”
The new store on East Valley Boulevard opened this month. One of its sister stores — dd’s Discounts, part of the same parent company — opened in North Hollywood.
This year, parent company Ross Stores Inc. plans to open 110 new stores nationwide, building on the 90 it opened last year.
Read more: Ross Dress for Less opens new store in Alhambra
Ross CEO Jim Conroy said Ross is gaining market share by attracting customers from other retail chains.
“The shift in share is more from mainstream retail, department stores and other places like that,” he told analysts after announcing strong growth earlier this month.
Other discount stores, including TJ Maxx, Dollar General, Nordstrom Rack and Five Below, are also expanding to take advantage of the tough times.
Read more: As Gen Z starts to thrift, a Melrose Avenue store finds success in influencers’ wardrobes
Placer.ai, which tracks people’s movements based on mobile phone usage, said retail data shows shoppers are traveling to a wider range of destinations in search of lower prices.
“Consumers are becoming increasingly discerning and price-conscious, actively shifting away from traditional mid-market chains and toward discount retailers and value-oriented brands,” Placer.ai said in a report this month. “As affordability remains a core concern, average households are visiting discretionary stores more in search of deals.”
Discount retailers have been popular for decades, but a variety of factors are now pushing some retailers to accelerate growth, experts say.
Read more: Ross Dress for Less opens new store in Alhambra
Dollar stores and the first discount retailers became popular in the 1990s but really took off around 2010 after the recession, said Dylan Carden, a professional retail analyst at William Blair.
Since then, the stigma against budget stores has lessened among both customers and brands.
“They do a great job,” Carden said of major discount retailers such as Ross and TJX, which owns TJ Maxx, Marshalls and Home Goods.
Established retailers already grappling with stiff competition from online retailers have been hit over the past year or so as customers cut back on discretionary spending due to inflation, tariffs and global conflicts.
A deal sign hangs on the wall of a new Ross store in Alhambra. (Jason Almond/Los Angeles Times)
For stores like Ross, lower department store demand means an increased supply of discounted products, as they often buy unsold merchandise from struggling high-end stores and manufacturers.
“These companies offer great value to shoppers, but they may offer even greater value to brands,” said Simon Siegel, senior managing director at Guggenheim Partners. “They have solidified their role in the retail ecosystem.”
Read more: As Gen Z starts to thrift, a Melrose Avenue store finds success in influencers’ wardrobes
Five Below, a Pennsylvania-based discount store for teens, will open 150 new stores in 2025 and plans to open more this year. Its same-store sales increased 15% in the fourth quarter of last year.
Ross sells everything from ties to shower curtains. Profit in the fourth quarter of last year increased by 10% compared with the previous year. Ross reports that sales will reach a record high of $22.8 billion in 2025, an increase of 8% over the previous year. Its net income was $2.1 billion, similar to 2024, while comparable store sales increased 5%.
Investors are pleased with its outperformance.
Ross’ stock price has soared about 70% in the past year. TJX shares rose about 30%.
A man leaves a new Ross store after shopping. (Jason Almond/Los Angeles Times)
According to its latest financial report, TJX’s sales and net profit also increased year-on-year. It plans to open 146 new stores this year.
“Revenue, stores and business are all doing great,” Siegel said. “They’re definitely hitting their stride.”
In contrast, some department stores are struggling.
Macy’s closed two stores in California earlier this year as part of a plan to reduce its footprint by 30% by 2027. Twelve more U.S. stores planned to close in coming months
Read more: ‘Experiential’ retail surges as landlords try to lure customers back to malls
Saks Global, which owns the Saks Fifth Avenue and Neiman Marcus brands, filed for Chapter 11 bankruptcy protection in January, citing excessive debt.
“The pressure on department stores and the success of discounting is no coincidence,” Siegel said. “There’s a clear connection. Discount stores have effectively become the new department stores.”
In addition to opening new stores, Ross is also working to streamline the shopping process by better organizing stores and adding self-checkouts to more branches.
The new Ross store in Alhambra features multiple self-checkout lanes and fully stocked aisles organized into categories such as apparel, technology and cosmetics.
Lopez, a regular shopper at Ross Dress for Less, put a pack of hangers in her shopping cart along with her new purse before checking out.
“I always seem to find what I need,” she said.
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This story originally appeared in the Los Angeles Times.
