Is the behemoth known as Macy’s going to homogenize the traditional department store industry, offering the consumer few shopping alternatives going forward? It appears so.
With the recent announcement of the liquidation of Gottschalks, one wonders whether the regional department store industry can survive. The Bon Ton, with 280 stores operating under the Bon-Ton, Bergner’s, Boston Store, Carson Pirie Scott, Elder-Beerman, Herberger’s and Younkers nameplates is struggling, with March sales down more than 11% compared to March of 2008. Dillard’s, with well over 300 stores fared even worse in March, 2009, with sales decreases of just over 20% compared to the same time in 2008. Prepare to see both chains close some stores in the near future.
So, what are the options other than Macy’s for those consumers looking to shop the traditional department store? The most likely scenario in this economic climate is that the consumer will trade down to the junior department stores (Kohl’s, JC Penney and to a lesser extent Sears) and the off-price chains such as Ross, TJ Maxx, Marshall’s and Stein Mart. A few consumers (very few) are expected to trade up to Nordstrom, Saks and Neiman’s.