In
a recent report released today, Wednesday, November 11th, the iconic renowned retailer
Macy’s, owner of the Bloomingdale’s chain, reported third quarter sales down 5%
from a year ago. With this report, Macy’s also stated that sales in the upcoming
fourth quarter, typically the strongest of the year for the company, are
anticipated to be lower than last year as well. The article then went on to
state that this drop in sales could be attributed to “sluggish demand from
American consumers and a continued slowdown in visits from foreign shoppers…
[since the] strong dollar has caused many European and Asian tourists to stay
home…” Due to this, Macy’s has also decided to no longer consider plans to spin
off its real assents into a new company – further disappointing consumers – and
driving down consumer demand even more…
Why do you think this slowdown is the case when the
American economy is stronger than ever? Is it solely due to the strong presence
of the American dollar in the global marketplace? Other companies like Amazon,
Walmart, and Kohl’s have also reported being hit hard this quarter due to
concerns about increased competition. That being said, Macy is not the only one
feeling the lose. So, what do you think the future holds for the upcoming
holiday season? Will these companies be able to make up their loses or will the
lack of consumer demand and high value of the American dollar continue to drive
down sales?
5 comments:
I wonder if this is because Macy's is a mid-range retailer. Meaning, it sells goods that aren't as expensive as say, Nordstrom or Saks. Or, because the holiday season is coming up, people have been saving to spend for the holidays.
The article also mentioned how fast fashion retailers are taking a big market share, and that's another good point. People are willing to spend less money on clothes several more times a year vs. one big shopping haul. Macy's might be out of touch with their consumer base and not carry the merchandise people want to buy.
However, we will have to see what their holiday earnings will be to make an accurate guess as to their future situation.
I agree with Emily that this could be cuased by people who are trying to save for the coming up holiday season. And it is true, that the high value of American dollar can somehow reduce the demand from certain consumers, I know that in my country people are getting less excited to buy from overseas.
I too agree with Emily that Macy's may be suffering such a loss in large part due to the fact that they are a mid-range retailer. Many retailers seem to be experiencing the same instability at this point in the year, as consumers are savings before going on a spending spree throughout the holidays. However, Macy's may also need to think about changing their marketing and merchandising strategies. It seems as if Macy's has been on a down spiral for many years now. A mid-range retailer who offers coupons constantly and has a sale almost every day is not appealing to customers who aren't in the market for low quality goods, and makes the company seem lower-scale than they really are. It would be best for Macy's to see how their holiday turnout is in terms of sales, and then start to formulate a plan for revamping their image.
Macy's definitely still has the reputation for being a mid-range retailer and many people are looking for low-range for most goods. Macy's also still carries with it the reputation of being a store that you go to for shopping, rather than online. Most people are looking for the convenient, online shopping and Macy's is not the first place that comes to mind. Other online giants are taking this place.
I feel as if this is a combination of a strong American dollar in the global economy, as well as the change in shopping behaviors of consumers. As someone who does not live in the United States, the exchange rate does not create an incentive for people to spend money in the American economy. In addition to that, the shift in shopping behavior of consumers where more frequent, less spending is valued more then splurging at one given time, like at Christmas for instance. Overall I think these slowdowns for Macy's can be justified by these two things, but I don't feel like it is anything for them to really be concerned with, it's just a shift in consumer behavior and they need to alter their strategy a bit to accommodate them better.
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