Ross’ Procurement Scale and Vendor Network Help Cement Wide Moat in the Off-Price Channel

As the second-largest off-price retailer in the U.S. with about 30% market share, we believe Ross Stores’ unique inventory procurement method and scale positions the firm to comfortably expand its top line at a mid-single-digit pace while fending off competition from online channels in future. We suggest that Ross’ standing as a reliable sales outlet for product manufacturers and traditional (or full-price) retailers looking to discretely liquidate excess inventory should provide the firm with an abundant assortment of buying opportunities. Ross consistently stocks its more than 2,100 stores with a wide assortment of branded merchandise at bargain prices due to its plentiful vendor relationships and meticulous inventory management.