Spring Retail Outlook: Who’s up, who’s down

A recent article in The Wall Street Journal begins to tell a story about which retailers are winning — and struggling — in the current downturn. March year-on-year sales across a range of national retailers indicate an emerging, and unsurprising, pattern.

  • BJ’s +8.5%
  • Family Dollar +6.4%
  • Costco +3.0%
  • Ross +3.0%
  • T.J. Max +2.0%
  • WalMart +1.4%
  • Target -6.3%
  • J.C. Penney -7.2%
  • Macy’s -9.2%
  • Saks -23.6%
  • Nieman Marcus -29.9%

What does this tell us? Americans are buying, but they are choosing those retailers that offer the greatest possible value. The six retailers here showing year-on-year increases are each known for offering the lowest possible prices in their own category. Traditional department stores, on the other hand, are feeling the heat. Saks and Nieman Marcus, long associated with designer luxury apparel, suffer double-digit losses. Even the more mainstream Macy’s cannot keep the pace.

The only real surprises here are Target and J.C. Penney, two great “discount” department stores. We would expect that Americans would continue to seek reasonable value in addition to store experience and customer service, but these losses suggest that the only real driver of retail growth lies in “lowest possible price.”

Are things really this bad? Will early indications of a possible recovery begin to turn the tide in favor of those stores that continue to offer customer service and store experience? Time will tell. In the meantime, we welcome your comments.