- Inflation woes are not affecting department stores equally. Placer.ai analysis found that, based on the four months studied, visits to Dillard’s declined the most between June and September year-over-year compared to Kohl’s, Macy’s and Belk. Dillard’s saw the most significant drop in June at -20.9%, followed by July (-19.9%), August (-14.5%) and September (-12.4%).
- In its analysis of luxury department stores Neiman Marcus, Bloomingdale’s, Nordstrom and Saks Fifth Avenue, Placer.ai found that Nordstrom saw its visits fluctuate between June and September. Nordstrom saw the greatest year-over-year decline in August at -9.7%, followed by -3.9% in July, -2.5% in September and -2.1% in June.
- Among the luxury department stores, Saks Fifth Avenue was the only store that saw year-over-year growth in visits between June and September. While its visits declined in June (-2%), July (-3.7%), and September (-4.5%), the retailer’s in-store visits increased by 0.6% in August, according to Placer.ai.
Despite the decline in foot traffic, Placer.ai noted shrinking reductions in visits are an encouraging sign for mid-range retailers, because stimulus payments and store reopenings primarily drove growth in 2021 after the COVID-19 pandemic shutdowns in 2020. The report also attributed the smaller gaps in visits for luxury retailers to the fact that high-income consumers aren’t feeling as much of a financial strain from inflation as their middle- and low-income counterparts.
The Placer.ai report attributes the gap in visits for Macy’s to its full-size store closures this year. In July, the retailer replaced its full-line Macy’s store in the St. Louis area with a Market by Macy’s concept at the Chesterfield Commons.
The Placer.ai report offers a glimpse into how inflation is affecting some stores more than others as consumers change their spending habits in accordance with their financial situation. A recent Morning Consult survey found that 85% of respondents had adjusted their spending habits due to rising inflation.
However, it remains to be seen how much consumers across incomes will adjust their spending this holiday season. According to a JLL report released this month, nearly half of shoppers earning less than $50,000 a year are significantly reducing their holiday spending due to inflation, but only 24% of shoppers who make $150,000 more are cutting their budgets. On the other hand, a Deloitte report also released this month indicated that low-income consumers plan to spend 25% more compared to last holiday season, but high-income consumers are only spending 7% more than last year.