{"id":3971,"date":"2026-05-25T13:05:35","date_gmt":"2026-05-25T13:05:35","guid":{"rendered":"https:\/\/www.fintechpulse8.com\/?p=3971"},"modified":"2026-05-25T13:05:35","modified_gmt":"2026-05-25T13:05:35","slug":"ross-stores-ceo-doubles-down-on-change-that-tests-shopper-loyalty","status":"publish","type":"post","link":"https:\/\/www.fintechpulse8.com\/?p=3971","title":{"rendered":"Ross Stores CEO doubles down on change that tests shopper loyalty"},"content":{"rendered":"

<\/p>\n

Ross Stores has seen stronger consumer demand in recent months as more shoppers hunt for lower prices. In response to this heightened momentum, the company\u2019s CEO is planning to roll out a major in-store change that risks hindering this growth.\u00a0<\/p>\n

The first few months of 2026 have been profitable for Ross, which also owns DD’s Discounts. In the first quarter of this year, the company saw a 17% year-over-year increase in its comparable store sales, according to its latest earnings report.<\/p>\n

Its operating income also spiked by 32.6%, compared to the same quarter in 2025. Foot traffic in its stores also ticked up. Overall customer visits in Ross locations rose by a whopping 18%, according to a recent Placer.ai report. <\/p>\n

Lila Margalit, content manager at Placer.ai, wrote in the report that off-price retailers like Ross are outpacing department stores in foot traffic growth.\u00a0<\/p>\n

\u201cOff-price\u2019s momentum is most visible in its widening lead over department stores,\u201d wrote Margalit. \u201cThe category captured 65.7% of combined visit share in Q1 2026, up from 62.2% in Q1 2025 and just 56.2% in Q1 2022.\u201d<\/p>\n

\u201cThese steady, multi-year gains underscore a structural shift in where consumers are choosing to shop \u2013 one that continues to accelerate as value becomes a central decision driver,\u201d she continued.<\/p>\n

Ross Stores CEO plans controversial store change as demand rises<\/strong><\/h2>\n

During the chain’s first-quarter earnings call on May 22, Ross Stores CEO James Conroy attributed a portion of the company\u2019s sales growth during the first quarter to an \u201cincrease in tax refunds.\u201d<\/p>\n

\u201cThe comp (comparable sales) increase was primarily driven by a growth in transactions, and we saw healthy increases in customer count on a comp store basis across income levels, ethnicities, and all age groups, including the young customer,\u201d he said.<\/p>\n

Conroy also said that Ross is \u201coutperforming\u201d its competitors in attracting younger customers aged 18 to 24. During the quarter, the company saw the strongest sales growth in its ladies’ and cosmetics categories as more of these customers entered its stores.\u00a0<\/p>\n

Amid increased consumer demand, Conroy said the company is confident it can expand its price points, including introducing higher-priced items in stores.\u00a0\u00a0<\/p>\n

Related: Ross Stores CEO eyes a change that could drive away shoppers<\/strong><\/p>\n

\u201cSo we have to ensure that we are in stock with sort of the best bargains across price points, but certainly the good price points,\u201d he said. \u201cBut then, when we look at our data, our customer KPIs (key performance indicators) are unbelievable, right? More customers shopping more frequently and spending more on each trip.\u201d\u00a0<\/p>\n

\u201cSo now we are trying to find if there is even some more opportunities to stretch our prices not on same goods, but on new brands and new goods,\u201d he continued. \u201cAnd really just deliver even a broader assortment for our customers out there.\u201d<\/p>\n

Conroy emphasized that the company\u2019s goal is to deliver the \u201cbest bargains and best values\u201d to customers, especially those under financial pressure. However, the company has a \u201cgrowing customer base that seems to be responding across good, better, and best.\u201d<\/p>\n

His comments follow his first tease of this pricing change during the company\u2019s earnings call in March.<\/p>\n

\u201cI think if we had a learning coming out of the quarter (fourth quarter of 2025), it is that we probably have the ability to push for some either higher-priced goods or potentially taking some retails up,\u201d said Conroy at the time.\u00a0<\/p>\n

\n

Ross Stores plans to introduce higher-priced items to customers amid rising sales growth.<\/p>\n

Shutterstock<\/p>\n<\/figcaption><\/figure>\n

Why this pricing change could risk sales growth<\/strong><\/h2>\n

Ross\u2019 push to roll out higher-priced items in stores could be a risky move as it threatens to push away price-sensitive shoppers.\u00a0<\/p>\n

As consumers feel the weight of inflation, tariffs and housing affordability challenges, they are cutting back their spending on discretionary items and are searching for more deals and discounts, according to a recent survey from A&M Consumer and Retail Group.<\/p>\n

How Americans plan to cut spending in apparel, footwear and beauty:<\/strong><\/h3>\n
    \n
  • Approximately 48%<\/strong> of consumers are pulling back <\/strong>on apparel spending, while 22%<\/strong> are prioritizing value.<\/li>\n
  • To reduce their spending on clothing and footwear, 49%<\/strong> are buying fewer<\/strong> items, 32%<\/strong> are taking advantage of sales and promotions<\/strong>, and 25%<\/strong> are making less<\/strong> impulse purchases.<\/li>\n
  • Also, 50%<\/strong> of consumers said they are cutting<\/strong> clothing and footwear spending due to budget and income <\/strong>changes.\u00a0<\/li>\n
  • Another 50%<\/strong> flagged price increases <\/strong>and weak sales promotions as the reasoning behind this spending reduction.<\/li>\n
  • Consumers are also cutting back <\/strong>on beauty<\/strong> purchases. Roughly 35%<\/strong> are buying fewer items, while 65%<\/strong> are switching <\/strong>brands and retailers in search of lower prices.
    \nSource: A&M Consumer and Retail Group\n<\/li>\n<\/ul>\n

    \u201cToday\u2019s consumers aren\u2019t simply tightening their belts \u2013 they\u2019re making thoughtful tradeoffs,\u201d said Chad Lusk, managing director at A&M Consumer and Retail Group, in a statement to Chain Store Age. \u201cThey\u2019re cutting back on volume and dramatically changing shopping routines to stretch their wallets.\u201d<\/p>\n

    Ross Stores bets big on rising consumer demand<\/strong><\/h2>\n

    As Ross plans to introduce higher-priced merchandise in its stores amid increased consumer demand, it is also expanding its retail footprint rapidly, especially in newer areas such as the Northeast.<\/p>\n

    The company plans to open 110 new stores nationwide this year, comprising of 85 new Ross locations and 25 new DD\u2019s Discounts stores.<\/p>\n

    Amid this expansion, Ross expects comparable store sales growth for fiscal year 2026 to increase by 6% to 7%.<\/p>\n

    More Retail:<\/strong><\/p>\n

      \n
    • Target sees unexpected shift in customer behavior<\/strong><\/li>\n
    • Publix faces consumer boycott threat after store policy change<\/strong><\/li>\n
    • Ross Stores CEO eyes a change that could drive away shoppers<\/strong><\/li>\n<\/ul>\n

      \u201cWe are raising our fiscal 26 sales and earnings guidance to reflect the exceptional first quarter results and the solid second quarter guidance,\u201d said Ross Stores Chief Financial Officer William Sheehan during the earnings call.<\/p>\n

      The increased confidence in sales growth comes as consumers face rising gas prices, further threatening retail sales. However, Ross Stores Chief Operating Officer Michael Hartshorn said during the call that this could benefit the company.\u00a0<\/p>\n

      \u201cI would say on fuel costs, generally, historically, it is been hard for us to see any immediate direct correlation between fuel prices and our sales performance,\u201d said Hartshorn. \u201cThat said, obviously, the potential impact can vary based on the magnitude and how long the increased fuel prices last.\u201d<\/p>\n

      \u201cI would also add the silver lining for off-prices that any uncertainty in the macro environment could lead to customers taking more value when shopping and create closeout opportunities for us for the supply set,\u201d he added.<\/p>\n

      Related: Target sees unexpected shift in customer behavior<\/strong><\/p>\n

      #Ross #Stores #CEO #doubles #change #tests #shopper #loyalty<\/p>\n","protected":false},"excerpt":{"rendered":"

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