The news: Macy’s is opening more smaller-format stores and shifting away from malls as it adjusts its retail footprint to accommodate changing consumer behaviors, per CNBC.
- The retailer plans to open three new Market by Macy’s stores by the end of the year.
- Macy’s will also close a department store in a St. Louis, Missouri, mall and open a smaller store nearby.
Other retailers follow suit:
- Nordstrom currently has seven Nordstrom Local locations, as well as a pop-up in the Hamptons. The stores don’t carry merchandise but offer online pickup, returns, personal styling, and other services to urban shoppers.
- Target is opening small-format stores in dense urban areas, like Times Square and Charleston, South Carolina, as well as mid-size locations in well-populated suburbs.
- Kohl’s plans to open around 100 smaller stores in the next four years in a bid to expand to smaller markets and provide a “hyper-localized” experience.
Malls can’t keep up: A major reason for the shift into neighborhoods is the fact that malls, once a focal point of the American shopping experience, have been in decline for years. Even outlet discounts aren’t enough to tempt consumers as high gas prices keep shoppers close to home.
- Visits to indoor malls and open-air shopping centers fell 3.7% and 2.49% month-over-month respectively in June, per Placer.ai.
- Traffic to outlet malls in June declined 6.7% year-over-year, and is 14.3% lower than in 2019.
- Remote work has also given people fewer reasons to leave their neighborhoods, requiring retailers to venture further into suburbia.