Burlington and Ross Double Down on Value as Consumers Seek Deals

In an era where consumer confidence is being tested by inflation and rising living costs, off-price retailers like Burlington Stores and Ross Stores are doubling down on strategies that emphasize value and flexibility. Both companies have adapted to increased demand for discounts by balancing quality, strategic assortments, pricing and store growth.

Read more: Trade and Tariffs Worries Drive Decline in Consumer Confidence

Burlington Elevates Product Assortments

For Burlington Stores, the strategy of “elevating” its product offering has been pivotal in maintaining its competitive edge. In 2024, the company introduced a higher mix of national brands and better-quality products across key categories. During the company’s fourth-quarter earnings call, CEO Michael O’Sullivan said the focus was not just on higher-end brands but on improving the overall value proposition across different price points.

This included offering higher-quality fabrics, more up-to-date fashion, and enhanced embellishments to meet the needs of both price-sensitive and style-conscious customers. This move paid off, with Burlington reporting a 6% increase in comparable store sales in the fourth quarter, signaling strong customer approval of its refined product assortment.

“We went after opportunities to elevate the assortment at all price points, paying close attention to the Need a Deal as well as the Want a Deal shopper,” O’Sullivan told analysts. “We drove this elevation strategy throughout last year, but it was most evident and powerful in the fourth quarter. I interpret our 6% comp sales growth in Q4 (and grew 4% for the full year) as just the customer telling us that they approved of this strategy and really loved our assortment.”

This emphasis on value-driven assortment is crucial as Burlington continues its expansion strategy, O’Sullivan added.

In 2024, the company opened 101 new stores. It plans to maintain this pace with an anticipated 100 net new stores in both 2025 and 2026. With long-term projections calling for mid-single-digit comparable sales growth through 2028, Burlington’s growth trajectory looks strong, underpinned by its ability to attract a broad range of consumers with varying needs and spending habits.

Burlington’s ability to cater to both lower-income and middle-income shoppers has been a key driver of its success, O’Sullivan said.

“Our stores that are in lower-income trade areas were the strongest performing stores in the chain,” he said. “But we also saw a very healthy mid-single-digit comp store sales growth in moderate- and higher-income trade areas. We believe comp growth in those stores was driven by the trade-down customer. The strongest comp sales growth rates in Q4 were in price buckets well above $10. That’s the trade-down customer. We are very pleased with the strength of our business with our core Need a Deal shoppers and we’re also very pleased with our success in attracting the want to deal or the trade-down shopper.”

See also: How Consumers Shop: Five Insights From This Year’s PYMNTS Intelligence Reports

Ross Stores Leverages Branded Discounts

Ross Stores, similarly, has benefited from offering branded goods at discounted prices, though its performance has been somewhat more volatile. In fiscal 2024, Ross reported total sales of $21.1 billion, marking a 3.4% increase over the previous year. Comparable store sales rose by 3% in the fourth quarter, following a robust 7% gain in the same period in 2023.

The company’s ability to attract customers with its improved assortments of quality branded bargains during the holiday season was a major factor in these positive results, as noted by CEO James Conroy. But company officials have seen softer performance as it entered the first quarter of 2025, driven largely by macroeconomic pressures that have dampened consumer spending.

“We have seen softer business as we transitioned out of the fourth quarter and into the first quarter,” Conroy said during the company’s fourth-quarter earnings call. “While there are always opportunities for us to improve our execution, we believe the softness we are currently seeing is primarily due to macro pressures, impacting consumer confidence, resulting in a pullback in discretionary spending.

“That said, we believe that some of the recent challenges we are seeing could be transitory in nature,” he added. “Additionally, we anticipate that the volatile external environment will result in more opportunities for closeout merchandise and could set us up well to deliver even greater values on branded goods in future quarters.”

Looking ahead, Ross has adopted a cautious approach, forecasting comparable store sales growth for 2025 to be in the range of -1% to +2%. While the company acknowledges the challenges posed by the external environment, Conroy noted that Ross’s flexible business model and ability to source closeout merchandise could help mitigate these pressures.

Both companies are adjusting to a challenging retail environment marked by rising inflation and shifting consumer priorities. The recent PYMNTS Intelligence report, “Struggling Consumers Go to Short-Term Strategies to Manage Higher Expenses,” revealed that rising costs, including higher bills, were pushing consumers to adapt their financial habits.

On average, individuals living paycheck to paycheck took 5.9 steps to cope with rising bills, nearly twice as many as the 3.2 steps taken by those who are financially stable. These actions often included emergency measures like skipping or partially paying bills (33%), while fewer opted for solutions like negotiating rates (12%). Many also reported canceling services (22%) or seeking financial assistance programs (24%).

Financial pressure has led many consumers to live paycheck-to-paycheck, prompting retailers to adapt their strategies to cater to cost-conscious shoppers. With inflation continuing to surpass income growth, PYMNTS Intelligence data shows 67% of U.S. consumers are living paycheck-to-paycheck.