Macy’s returns to pre-pandemic sales and faces inflation

Macy’s, the owner of the Bloomingdale’s and Bluemercury chains, saw its overall sales last year recover to pre-pandemic levels. But the retailer’s top executive said he expected a “transitional” year ahead because of the pandemic and high inflation.

Macy’s said on an earnings call Tuesday that while inflation can “erode consumer discretionary income,” it has several strategies for managing pressure. It aims to reduce costs by sourcing from more countries and purchasing less inventory. It also uses customer data to find optimal opening prices for everything from shirts to sofas, personalize offers through loyalty programs, and roll out deeper discounts. at individual stores based on product performance there. (Typically, discounts will take place at the regional level.)

“The big difference at Macy’s now compared to previous times when we’ve dealt with inflation is that we have data analytics and valuation science at a much more granular level that helps us make choices make the right choice,” Jeff Gennette, chief executive officer, said in an interview. .

Macy’s performance in 2021 signals a resurgence of leaner and more digitally-oriented retail in the United States, and the company will benefit this year from growing demand if more people resume social events and go back to work.

overall sales last year was $24.5 billion, with net profit of $1.4 billion, compared with 2019 sales of $24.6 billion and net profit of $564 million. Revenue has plummeted to $17.4 billion in 2020. Macy’s posted a net loss of $3.9 billion that year, with most consumers isolated, holiday plans canceled and travel all but does not exist.

The company’s latest Q4 sales – including the all-important holiday season – exceeded sales in 2019, despite the Omicron wave of the coronavirus.

In New York City, where Macy’s is based, the company is predicting international travel will return by 2023, and its top spot, Bloomingdale’s, has increased, Gennette said. International sales account for about 3% to 4% of the business at Bloomingdale’s and Macy’s. About half of that business is back in 2021, largely due to e-commerce.

Macy’s is developing a plan for its office workers to return to a hybrid style, and it hopes more shoppers will return to its stores. Gennette said he “welcomes” Mayor Eric Adams’ efforts to focus on safety in New York. Macy’s, he said, has been working with Breaking Ground, an affordable housing nonprofit, to help reach and introduce services to homeless adults in the Herald Square area, where it’s located. retailer and flagship store headquarters.

“I appreciate what the mayor is doing around the Herald Square and what he’s doing with Penn Station, and you see that happening in other major cities across the country, where you have towns The same chief is taking an aggressive approach to making sure it’s safe for colleagues and customers,” said Mr. Gennette.

He added that while the Omicron wave has pushed back the reopening of offices in the city, “it is starting to loosen up again, and so I expect you will see more and more people in the offices.” office”.

https://www.nytimes.com/2022/02/22/business/macys-sales-report.html Macy’s returns to pre-pandemic sales and faces inflation

Fry Electronics Team

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