What: Macy’s CEO is modelling the company’s turnaround on Costco’s strategy, emphasising private labels, operational focus, and customer loyalty.

Why it is important: The focus on customer loyalty and in-house brands highlights a key competitive lever for department stores, echoing findings from recent industry reports.

Macy’s is undergoing a significant transformation under CEO Tony Spring, who is taking cues from Costco’s disciplined approach to retail. By prioritising operational consistency, investing in top-performing stores, and expanding private label offerings, Macy’s aims to build stronger customer loyalty and improve profitability. The company’s renewed emphasis on quality and exclusivity in its in-house brands, such as the launch of Arch Studio, is designed to differentiate Macy’s from competitors and capture a greater share of consumer spending. Store closures and a sharper focus on high-performing locations reflect a broader industry movement toward footprint optimisation in response to evolving shopping behaviors. This strategy is already showing early signs of success, particularly in luxury segments and pilot stores, even as Macy’s continues to face activist investor pressure and intense competition from both big-box retailers and digital players. The retailer’s efforts to blend operational streamlining with private label innovation position it to regain relevance and drive sustainable growth in a rapidly changing retail environment.

IADS Notes: In September 2025, Forbes reported that Macy’s targeted investments in select stores and luxury divisions were delivering incremental gains, though structural challenges persisted. The same month, another Forbes article highlighted Macy’s return to sales growth, attributing this to the Bold New Chapter strategy and strong performance from Bloomingdale’s and Bluemercury. In January 2025, Inside Retail detailed how data democratisation and store optimisation, particularly through the First 50 pilot stores, were driving customer satisfaction and sales growth. March 2025 saw Macy’s launch Arch Studio, a new private home brand, reflecting a broader push to increase private label sales beyond 20% of total volume. The Economist’s May 2025 analysis underscored the growing influence of private labels and the operational power of big-box retailers like Costco, reinforcing the strategic direction Macy’s is pursuing.

Macy’s CEO looks to Costco