For more than 150 years, Macy's has been one of the most iconic names in the department store game. But at the end of 2021, loyal Macy's customers were given some potentially upsetting news: The company announced that it was planning to shutter 125 stores over the next thee years, with 60 closures planned for 2022 alone. That isn't the only change Macy's is set to initiate this year, however. Read on to find out what else the iconic department store chain has in store for you.
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Shoppers have steadily been moving away from large indoor shopping malls.
iStockTrends in the retail space have changed significantly over the last few years. Shoppers have moved away from large indoor shopping malls and have instead shifted their focus to smaller suburban centers, like grocery-anchored shopping hubs and strip mills, The Wall Street Journal reported. Brandon Isner, head of Americas retail thought leadership at CBRE Group Inc., told the newspaper that these centers have become the "backbone of retail over the last five to 10 years."
According to CRE, retail availability in both grocery-anchored hubs and strips malls has declined from nearly 13 percent in 2012 to less than 8 percent now—indicating a clear picture of how many retailers have turned their sights on opening stores in these smaller centers. On the other hand, availability at indoor malls has been increasing over the years as retailers close up shops there.
Macy's started experimenting with smaller stores as a result in 2020.
ShutterstockThe mass mall exodus has only accelerated. According to The Wall Street Journal, the rise of online shopping and millennial migration to the suburbs have aided in the downfall of malls, but the pandemic significantly exacerbated the shift. In an effort to avoid serious repercussions from the decline of malls, Macy’s started opening up smaller department stores in 2020, according to The Wall Street Journal. Dubbed Market by Macy's, the shops are only around 22,000 to 58,000 square feet—making them about one-fifth of the department store chain's original locations.
"It’s the Macy’s you know and love—just a smaller version," Macy's explains on its website. "Packed with convenient services, fun events & the latest trends, each store is designed to make shopping quick & easy.
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This store format has already started attracting new shoppers to Macy's.
iStockMacy's has opened five Market by Macy's locations over the past two years in Atlanta, Georgia, and throughout Texas—and the results appear promising. Chuck DiGiovanna, Macy's head of real estate, told The Wall Street Journal that not only have these stores successfully attracted new and existing customers, but sales at Market by Macy's for the fourth quarter of 2021 exceeded the company's expectations. The smaller store format also brought in new customers at a higher rate than Macy's regular department stores, DiGiovanna added.
The company is planning to open up more smaller stores this year.
ShutterstockAs a result of the positive shopper feedback, Macy's has decided to accelerate its rollout of smaller stores, according to The Wall Street Journal. The company is now planning to add an additional 10 off-mall locations, which will include Market by Macy's shops, as well as other smaller-formatted ventures for the company such as Macy’s Backstage, Bloomie’s, and Bloomingdale’s outlets.
“There are so many people working from home, these suburban power centers have really been strong,” DiGiovanna told The Wall Street Journal. "But we were heading in that direction anyway."
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