<PAGE>
 
                                UNITED STATES 
                      SECURITIES AND EXCHANGE COMMISSION        
                           WASHINGTON, D.C. 20549                
                                                  
                                                  

                                SCHEDULE 13G
 
 
                  UNDER THE SECURITIES EXCHANGE ACT OF 1934
                           (AMENDMENT NO. __2__)*
 
                               Nordstrom, Inc.
- -------------------------------------------------------------------------------
                              (Name of Issuer)

                                   Common
- -------------------------------------------------------------------------------
                       (Title of Class of Securities)

                                  655664100
                 -------------------------------------------
                               (CUSIP Number)


Check the following box if a fee is being paid with this statement []. (A fee
is not required only if the filing person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7).

*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter the
disclosures provided in a prior cover page.

The information required in the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).






                               PAGE 1 OF 4 PAGES

<PAGE>
 
- ------------------------                                  ---------------------
  CUSIP NO. 655664100                     13G                PAGE 2 OF 4 PAGES
- ------------------------                                  ---------------------
 
- -------------------------------------------------------------------------------
1      NAME OF REPORTING PERSON
       S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
 
       Dodge & Cox                     94-1441976
 
- -------------------------------------------------------------------------------
 2     CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*        (a) [_]
                                                                (b) [_]
 
       N/A

- -------------------------------------------------------------------------------
 3     SEC USE ONLY
 
 

- -------------------------------------------------------------------------------
 4     CITIZENSHIP OR PLACE OF ORGANIZATION
 
       California - U.S.A.

- -------------------------------------------------------------------------------
                     5     SOLE VOTING POWER
 
     NUMBER OF             4,596,887
 
      SHARES       -----------------------------------------------------------
                     6     SHARED VOTING POWER
   BENEFICIALLY
                           70,900
     OWNED BY
                   -----------------------------------------------------------
       EACH          7     SOLE DISPOSITIVE POWER
 
    REPORTING              5,195,137
 
      PERSON       -----------------------------------------------------------
                     8     SHARED DISPOSITIVE POWER
       WITH
                           0

- -------------------------------------------------------------------------------
 9     AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
 
       5,195,137

- -------------------------------------------------------------------------------
10     CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES*
 
       N/A
 
- -------------------------------------------------------------------------------
11     PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 9
 
       6.7%
 
- -------------------------------------------------------------------------------
12     TYPE OF REPORTING PERSON*

       IA

- -------------------------------------------------------------------------------
                    *SEE INSTRUCTION BEFORE FILLING OUT!
                              PAGE 2 OF 4 PAGES

<PAGE>
 
          Item 1(a) Name of Issuer:
                    --------------
                       Nordstrom, Inc.

          Item 1(b) Address of Issuer's Principal Executive Offices:
                    -----------------------------------------------
                    1501 Fifth Avenue
                    Seattle, WA  98101-1603

          Item 2(a) Name of Person Filing:
                    ---------------------
                    Dodge & Cox
 

          Item 2(b) Address of the Principal Office or, if none, Residence:
                    -------------------------------------------------------
                    One Sansome St., 35th Floor
                    San Francisco, CA  94104

          Item 2(c) Citizenship:
                    -----------
                    California - U.S.A.
 

          Item 2(d) Title of Class of Securities:
                    ----------------------------
                      Common
 
          Item 2(e) CUSIP Number:
                    ------------
                       655664100
 
 
          Item 3    If the Statement is being filed pursuant to Rule 13d-1(b),
                    ----------------------------------------------------------
                    or 13d-2(b), check whether the person filing is a:
                    -------------------------------------------------

                    (e) [X]  Investment Advisor registered under section 203 of
                             the Investment Advisors Act of 1940

          Item 4    Ownership:
                    ---------
                    (a)  Amount Beneficially Owned:
                         -------------------------
                         5,195,137

                    (b)  Percent of Class:
                         ----------------
                         6.7%
 


                              PAGE 3 OF 4 PAGES

<PAGE>
 
                    (c)  Number of shares as to which such person has:
                         ---------------------------------------------

                    (i)  sole power to vote or direct the vote: 4,596,887
 
                   (ii)  shared power to vote or direct the vote: 70,900

                  (iii)  sole power to dispose or to direct the
                         disposition of:  5,195,137

                   (iv)  shared power to dispose or to direct the
                         disposition of: 0


          Item 5    Ownership of Five Percent or Less of a Class:
                    --------------------------------------------
                    Not applicable.

          Item 6    Ownership of More than Five Percent on Behalf of Another
                    --------------------------------------------------------
                    Person:
                    ------
                    Securities reported on this Schedule 13G are beneficially
                    owned by clients of Dodge & Cox, which clients may include
                    investment companies registered under the Investment Company
                    Act and/or employee benefit plans, pension funds, endowment
                    funds or other institutional clients.


          Item 7    Identification and Classification of the Subsidiary Which
                    ---------------------------------------------------------
                    Acquired the Security Being Reported on By the Parent
                    -----------------------------------------------------
                    Holding Company:
                    ---------------
                    Not applicable.

          Item 8    Identification and Classification of Members of the Group:
                    ---------------------------------------------------------
                    Not applicable.

          Item 9    Notice of Dissolution of a Group:
                    --------------------------------
                    Not applicable.

          Item 10   Certification:
                    -------------
                    By signing below I certify that, to the best
                    of my knowledge and belief, the securities referred to
                    above were acquired in the ordinary course of business and
                    were not acquired for the purpose of and do not have the
                    effect of changing or influencing the control of the issuer
                    of such securities and were not acquired in connection with
                    or as a participant in any transaction having such purpose
                    or effect.



                                   SIGNATURE

          After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true, complete
and correct.

Dated:  February 12, 1998
      -----------------
                                      DODGE & COX

                                      By:     /S/ W. TIMOTHY RYAN
                                         ---------------------------------------
                                      Name:   W. Timothy Ryan
                                           -------------------------------------
                                      Title:  Senior Vice President
                                            ------------------------------------



                              PAGE 4 OF 4 PAGES