It’s no secret brick-and-mortar is struggling, but Macy’s chairman and CEO Terry Lundgren—who still very much believes in the store—says talk about the format’s demise is overblown.
In an interview for CNBC’s “On the Money,” Lundgren agreed that the notion of the department store’s death is “grossly exaggerated.”
As he pointed out, “In the last five years my own company has grown by $5 billion with 38 less stores than we had five years ago.”
And Thursday’s Thanksgiving turnout was anything but an indication that consumers aren’t interested in stores.
“If you saw the traffic when we opened the doors at 6 p.m. flowing into stores like Macy’s Herald Square, you’d say people definitely want to shop on that night in a store like Macy’s,” he said.
Whether department stores will recover from waning sales in the face of increased mobile buys remains to be seen, but consumers have undoubtedly shifted their habits in favor of omni-shopping.
Software company Adobe said online sales hit $2.72 billion on Black Friday, a 14 percent increase over last year, driven mostly by mobile, and Thanksgiving day jumped 25 percent to $1.73 billion.
“We’re the seventh largest Internet company retailer in America at this point in time and we’re inching toward being sixth by the need of this year,” Lundgren explained. “The online business is a complete strength for macys.com and bloomingdales.com.”
The tactile experience that consumers still seek remains one win stores retain over web, and many shoppers scour the Internet for products to purchase, come into stores to touch and try them and ultimately have their pick of whether to buy in the store or order once they’ve reached home.
“The consumer likes that multi-dimensional experience today more so than ever,” Lundgren told CNBC. “I think the stores that are strong online and strong in store will be the winners of retail in the future.”
Lundgren acknowledged Macy’s challenging third quarter, attributing the 5.2% dip in sales for the quarter in part to slowed consumer spending and unseasonably warm weather, but said the company has seen both its online and in-store business going strong so far this holiday season.
When asked about the health of the American consumer, Lundgren told CNBC the U.S. shopper “seemingly is doing OK.”
“You’re seeing consumers buying cars, you’re seeing consumers do major home improvements, you’re seeing consumers go to restaurants, go out to dinner, you’re seeing certain categories doing quite well,” he explained. “In general consumers have the money to spend if they chose to do so and I think last night [Thanksgiving Day] frankly and through right now, through today [Black Friday], is an indication that they seem to be ready to spend in our categories.”