So far, the early data points look good, and suggest that the sector is in heading in the right direction.
A blog post from Ethan Chernofsky, Placer’s vice president of marketing, noted both year-over-year and two-year-ago comparisons for Kohl’s, Macy’s, JCPenney, Nordstrom, Dillard’s, Bloomingdale’s and Saks Fifth Avenue.
“Visits for all of the brands measured were up in March year over year, and while this was heavily driven by the comparison to an especially challenged 2020, all of the brands analyzed also saw the visit gap with 2019 shrink significantly when compared to February,” Chernofsky wrote in the blog. “Yet, the 2019 comparison in March is important as well, because it shows that many of these brands are still seeing significantly less visits than they were during ‘normal’ times.”
Data from weekly visits versus 2019 helps clarify the recovery trend, and while the “visit gap shrunk significantly” in mid-March and early-April, the “gaps actually increased later” in April, he added. A chart accompanying the blog pictured traffic data starting with the week of March 15 up to the week of April 19.
What the week-to-week comparison to 2019 figures shows is that the spike in March driven by pent-up demand likely dissipated, and that an increase in declines in later weeks likely was due to misalignment of holidays—such as the Easter weekend surge in 2019—from calendar shifts, along with slower return to stores in key states like California and New York, Chernofsky said. Because the declines in mid-April for week-over-week change is within a certain range instead of reflecting any significant shift, he believes the department store sector is in a “new stage in the recovery process” that reflects steady visit rates.
Chernofsky said each nameplate will have its own recovery rate, with the bounce back unfolding in stages. Kohl’s combination of new concepts and off-mall setting puts it in a good position, while Macy’s could face headwinds from regulations in California and New York where it has a sizable presence, he added.
“The department store sector is in the midst of ‘levelling up’ to a better place than it has been as a whole since the onset of the pandemic’s retail impact in the US. And while this is a major step forward, it isn’t a full recovery just yet,” Chernofsky said. “Regional differences, and ongoing concerns will likely continue to limit the full power of the recovery until at least the summer.”
Retailers still have to face the long-term challenges of evolving and remain relevant, issues that many were grappling with prior to the pandemic. While Chernofsky doesn’t agree with the “doom and gloom” that sometimes dogs the sector, he does believe that retailers willing to try new things are best positioned to succeed.