Retail

Department Stores Report Lower Holiday Sales Due To eCommerce Shift

Department Store

As Americans continue to move their purchases to eCommerce, robust consumer spending and a formidable U.S. economy weren’t sufficient to bolster holiday sales at many mall-based chains and department stores.

Kohl’s Corp., JCPenney Co. and L Brands Inc. (Victorias Secrets parent company) registered lower sales in November and December, The Wall Street Journal reported.

All traditional retailers aren’t struggling, however. Target and Walmart have notched increasing sales and store traffic for much of the past year while they dedicate effort to in-store pickup and online ordering services. Off-priced retailers like TJX Cos. have noted healthy sales as well.

“Our customer data shows that a chunk of clothing spend from Kohl’s customers has migrated to other retailers, most notably to Target and various off-price players,” Neil Saunders, managing director at GlobalData Retail, told WSJ. “This is reflective of the weaker proposition at Kohl’s but also underlines the success Target has had in improving its own offer.”

Costco Wholesale Corp., the warehouse club operator, noted that comparable sales increased 9 percent in the five weeks concluding on Jan. 5. The results include international stores as well as online sales. The retailer’s stock increased 2 percent Thursday morning and is trading close to all-time highs reportedly similar to shares of Target and Walmart.

In November, reports surfaced that Target Corp. increased its full-year outlook on profitability as well as strong sales. Online sales jumped 31 percent in the quarter, yet online shopping didn’t weigh on profitability as it has done in past periods.

Target’s online shopping investments, with the inclusion of the rollout of curbside pickup and same-day deliveries, have bolstered sales and brought in new shoppers who didn’t shop there in the past while helping to keep Amazon at bay.

The retailer also doubled down on toys over the holidays, bringing more than 24 mini-Disney stores to some of its locations and fulfilling sales made on a relaunched Toys R Us website.

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