Grim news continues to roll in for mall-based retailers, with several companies reporting declines in a key sales metric over the holiday period despite a broader rise in consumer spending, Bloomberg reports.
Kohl’s, J.C. Penney and L Brands all reported drops in same-store sales, which is a critical measure of retail success. Macy’s also reported a drop in comparable sales on Wednesday, although it noted improving trends, while Bed Bath & Beyond withdrew its financial projections amid weak results.
The holidays are the most important time of year for most retailers, so hopes for a sustained turnaround for beleaguered companies in large part hinged on a better performance in the final months of 2019. But deeply ingrained trends—such as digital-savvy shoppers migrating to wherever the discounts are, forcing prices down across the market—are preventing many retailers from regaining their former stature.
The biggest retailers, especially Amazon.com, Walmart and Target, are among the primary beneficiaries of the mall-based troubles. E-commerce gobbled up market share during the holidays, with web sales in the U.S. growing almost 19% compared to last year, according to Mastercard SpendingPulse data, which tracked sales from Nov. 1 to Dec. 24.
The results at J.C. Penney and Kohl’s suggest 2020 could be another difficult year for department stores, which were the worst-performing sector on the S&P 500 Index in 2019.
Right now, their main challenge is luring shoppers away from more niche options like Lululemon, according to Bob Phibbs, head of consulting firm Retail Doctor.
“In 2020, it’s all about knowing who your customer is, becoming a niche player and knowing how to deliver,” he says. Read the full story.
