Macy’s and other major retailers say slower sales indicate major problems for American economy
06/07/2023 // Cassie B. // Views

Major retailers are sounding alarm bells over the current state of the economy in light of shifting customer demand at their stores as they struggle to find new ways to remain profitable.

Big chains like the department store Macy’s and warehouse club Costco report that shoppers are changing their purchases and spending less money on discretionary purchases. Last week, for example, Macy’s had to cut its yearly profit and sales forecast in response to slowing customer demand.

CEO Jeff Gennette reported that they would be ramping up sales offerings in a bid to move some unsold merchandise after same-store sales dropped 8.7 percent in the last quarter. In the same time frame, Bloomingdales, which is slightly more upmarket, saw a 3.9 percent drop in sales.

Gennette said in an earnings call: “The US consumer, particularly at Macy’s, pulled back more than we anticipated,” adding that they were reallocating their spending on essentials like groceries.

Meanwhile, Costco Chief Financial Officer Richard Galanti said that customers had been shifting from more expensive cuts of beef to more affordable sources of protein, such as chicken and pork.

Adjusted department store sales have fallen from $11.723 billion in February to $11.398 billion in April, government data shows, with clothing store sales also dropping. Major chains are taking different approaches to dwindling sales, with Nordstrom focusing on its off-price Nordstrom Rack store. Macy’s off-price brand, Macy’s Backstage, is also expanding as consumers become more cost-conscious. In addition, Macy's is focusing on off-mall expansion as mall rental rates climb. Kohl’s, meanwhile, is looking to expand into underrepresented categories such as outdoors, pets, and gifts while promoting more essential items like underwear that people tend to buy regardless of the state of the economy.

We are building the infrastructure of human freedom and empowering people to be informed, healthy and aware. Explore our decentralized, peer-to-peer, uncensorable Brighteon.io free speech platform here. Learn about our free, downloadable generative AI tools at Brighteon.AI. Every purchase at HealthRangerStore.com helps fund our efforts to build and share more tools for empowering humanity with knowledge and abundance.

At Dollar General, which serves low-income customers, sales have been slowing as shoppers give up discretionary purchases like clothes and home goods and hold onto their money to keep up with the growing costs of necessities. After slashing its outlook on the heels of weaker customer demand, its stock fell 20 percent in early trading on Thursday. The company said in a statement that the current macroeconomic environment was having a bigger effect on consumer spending than they expected. They also cut their yearly outlook recently.

Spending could slow further when student loan repayments resume

Consumers are widely expected to cut their shopping budgets even further when student loan repayments start up again after being paused for several years. In a new report, UBS analysts identified apparel sales as one of the segments likely to be hardest hit.

After polling more than 1,400 individuals with student loans, they identified the retailers that are most at risk when the repayment pause ends and borrowers will have less money each month for discretionary spending. They found that Nike, Victoria’s Secret, Crocs and Nordstrom were the most likely to be affected. Other retailers that can expect a sales hit include Gap, Shopify, Under Armour, and American Eagle Outfitters.

In general, consumers dealing with inflation are considered more likely to defer clothing purchases than other types of spending, like home improvement, dining out and travel. According to the analysts, this trend is even stronger among those with student loans.

The pause on repayments originally went into effect in March 2020 as a means of offering financial relief to Americans during COVID-19-related shutdowns. It is now expected to end this summer. This will see millennials losing 6.5 percent of their spending power, according to PYMNTS, who expect retailers that cater largely to millennials, like Target, to suffer. They also report that subscription renewals with retailers like Walmart and Amazon are starting to decline.

Sources for this article include:

Edition.CNN.com

BusinessInsider.com

PYMNTS.com

ModernRetail.co



Take Action:
Support Natural News by linking to this article from your website.
Permalink to this article:
Copy
Embed article link:
Copy
Reprinting this article:
Non-commercial use is permitted with credit to NaturalNews.com (including a clickable link).
Please contact us for more information.
Free Email Alerts
Get independent news alerts on natural cures, food lab tests, cannabis medicine, science, robotics, drones, privacy and more.
App Store
Android App
eTrust Pro Certified

This site is part of the Natural News Network © 2022 All Rights Reserved. Privacy | Terms All content posted on this site is commentary or opinion and is protected under Free Speech. Truth Publishing International, LTD. is not responsible for content written by contributing authors. The information on this site is provided for educational and entertainment purposes only. It is not intended as a substitute for professional advice of any kind. Truth Publishing assumes no responsibility for the use or misuse of this material. Your use of this website indicates your agreement to these terms and those published here. All trademarks, registered trademarks and servicemarks mentioned on this site are the property of their respective owners.

This site uses cookies
Natural News uses cookies to improve your experience on our site. By using this site, you agree to our privacy policy.
Learn More
Close
Get 100% real, uncensored news delivered straight to your inbox
You can unsubscribe at any time. Your email privacy is completely protected.