Business

Do Macy’s Closings Signal the Death of Retail?

For Macy’s, the past Christmas wasn’t a season to be jolly.

The retail giant has announced plans to close 15 percent of its stores — 100 in total — this year, including its store in the Landmark Mall in Alexandria, Virginia where 120 associates will lose their jobs.

Macy’s officials realized a massive sales drop during the holidays and they’ve reacted decisively and, for some, drastically as more than 10,000 employees will be terminated.

With consumers opting to shop online and at discount retailers like T.J. Maxx and Marshalls, Macy’s, Sears, Kmart and even CVS have experienced a steep decline in business. Late last month, it was announced that at least 30 Sears and Kmart stores would close by the spring and CVS said it planned to shut down 70 locations.

“We continue to experience declining traffic in our stores where the majority of our business is still transacted,” Macy’s CEO Terry Lundgren said in a statement. “We are closing locations that are unproductive or are no longer robust shopping destinations due to changes in the local retail shopping landscape. These are never easy decisions.”

The real culprit behind the shuttering of Macy’s and other stores was underlined by Fortune Magazine, which noted that, after some 20 years of relentlessly assaulting Barnes & Noble and bankrupting Borders, Tower Records and Circuit City, Amazon has proved that consumers are more than eager to make the bulk of their purchases online.

More worrisome, perhaps, is the prospect of a future of joblessness. According to the Bureau of Labor Statistics, cashiers constitute the occupation with the second-largest number of employees — 3.5 million in the U.S.

Macy’s alone will be shedding 10,000 jobs.

Complicating the matter further is last month’s debut of Amazon Go — a 7-Eleven look-alike grocery store without a checkout line. Customers walk in, pick up what they want, and walk right out.

There are no cashiers. All purchases are charged automatically.

In an exposé for Fortune.com, Dr. Howard Yu, professor of strategy and innovation at IMD Business School in Switzerland, wrote that before the appearance of department stores and supermarkets, general stores, small shops, and itinerant peddlers sold many household items — such as soap, garments, paint and perfume — locally.

For centuries, face-to-face selling was dominant, with customers making repeated purchases from craftspeople. It wasn’t until mass manufacturing gathered steam, fueled by the national railroad and wider transportation networks, that the concept of a department store became viable, Yu wrote.

John Wanamaker, whom many generally regard as the pioneer of marketing, opened the first department store in Philadelphia in 1876.

Unlike small shops at the time, Wanamaker’s made use of price tags and a money-back guarantee. Out went constant haggling with small-time proprietors, and with it, various cottage industries.

Just as Wanamaker and its progeny — Macy’s, Lord & Taylor, Nordstrom, Saks and others — forever changed the retail landscape in dense cities, Sears made a dent in sparsely populated rural areas.

Sears, Roebuck & Co.’s mail-order business flourished at a time when farmers in rural America were selling their crops for cash and buying what they needed from rural general stores.

Truly the Amazon of its day, Sears leveraged its buying volume and ruthlessly cut out the middleman — the much-hated, high-priced rural stores.

“From Macy’s to Sears, the world of retail has been an epic race to the bottom: As the economy grew, consumers became more familiar with everyday items. When the novelty wore off, store ambience and friendly staff members became less important, if not downright frivolous,” Yu said.

“Today, low prices reign supreme. Little wonder that only discount retailers such as T. J. Maxx and Marshalls managed to escape unscathed during the holiday season.”

One former Macy’s employee in a local store, said Black shoppers and employees will be hit hardest by the closings.

“The majority of our Black customers were impulse shoppers so they didn’t tend to shop online,” said Jason Suggs, 38, a sales associate for four years and a resident of Silver Spring. “They would come in for a quick gift or something to wear later that day. Some customers still like to see and feel the item they’re purchasing, like a shirt, a jacket or pants. But convenience of online shopping and one-day delivery have taken hold of the American shopper.

“Unfortunately, holiday and summer jobs will be harder to come by for youth who in the past could always count on opportunities at stores like Macy’s, Sears and Saks where they could put a few dollars in their pockets and gain invaluable job experience,” he said.

As for one young Hispanic woman, a Macy’s sales associate, she said she’s concerned about whether there will be more store closings and if she will be affected.

“I work full-time for Macy’s and I like it a lot,” said Tania Rodriguez, 22, who lives in Silver Spring. “I followed my sister who was here before me and I now have almost three years under my belt. But I have to admit, I am a bit worried. Will more stores be shut down in the future? Will I have a job?”

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