What: US department store shopping declines, but Kohl's and Macy's maintain leadership with strong apparel sales.

Why it is important: The shift in shopping patterns and category preferences provides crucial insights into consumer behavior, helping retailers adapt their offerings and marketing strategies in a competitive market.

Coresight Research's latest survey reveals a decline in US department store shopping, with 58.6% of consumers making purchases in the three months ending August 2024, down 9.8 percentage points from May. Despite this overall decline, Kohl's and Macy's maintain their leadership positions, capturing 50.0% and 44.9% of department store shoppers respectively.The product category landscape has shifted, with men's clothing (47.5%) overtaking women's clothing (41.9%) as the most popular category. Footwear has seen increased popularity in 2024, with purchase rates around 43-45%, up from about 30% in late 2023.Luxury department stores experienced higher purchase rates in March 2024, possibly due to post-holiday sales events. However, beauty and home categories have seen the steepest declines since then, dropping 18.7 and 10.0 percentage points respectively.Consumer sentiment has turned pessimistic, with a net 1.0% expecting their household financial situation to worsen and 6.5% anticipating a decline in the US economy over the next 12 months. These trends underscore the challenges department stores face in attracting customers and maintaining sales in an evolving retail landscape.

IADS Notes: The US department store sector continues to face significant challenges. Recent data shows the sector's market share has plummeted from 14% of total retail sales in 1993 to less than 3% today . Major players like Macy's and Nordstrom are exploring privatization and restructuring to combat falling revenues and adapt to changing retail landscapes . Kohl's has identified a $2 billion sales opportunity, focusing on under-penetrated categories and partnerships like Sephora . Department stores are increasingly seeking to differentiate through unique brand offerings and targeting younger demographics . Despite these efforts, the sector faces ongoing pressure from e-commerce, changing consumer preferences, and economic uncertainties.

Department Stores in Focus—Kohl’s and Macy’s Lead the Way