Macy’s Focuses on Customer Experience and Long-Term Growth

In a retail world where growth is harder to come by, Macy’s is prioritizing stability over expansion, adjusting to the realities of a more competitive and unpredictable market.

Macy’s fourth-quarter results released Thursday (March 6) reflect a retail landscape where resilience is the key due to uncertain external factors and cautious consumers. As other retailers expand aggressively, Macy’s has held its ground, maintaining its store footprint amid a shifting market. This strategy hints at a deeper focus on operational efficiency rather than rapid growth, per Yahoo — perhaps an acknowledgment that consumer demand is not as strong as it once was.

The ongoing trend of declining same-store sales, averaging 4.5% annually over the past two years, paints a picture of a company adapting to changing shopping behaviors instead of chasing elusive growth. While analysts project a modest 4.1% revenue decline in the next year, this underscores the challenges Macy’s faces in sparking demand.

“We are pleased with our accomplishments, but recognize there is more work to be done,” CEO Tony Spring told analysts. “We are not yet where we need to be. We need greater focus and determination in fiscal 2025, and we’re cognizant of the external environment and the ongoing myriad of unknowns. I view it as being confident in the strategy and cautious with the environment.”

Macy’s fourth-quarter comparable sales fell 1.1% while net sales decreased 4.3%, to $7.8 billion. Bloomingdale’s reported 4.8% comparable sales growth and Bluemercury recorded its 16th consecutive quarter of comparable sales growth, up 6.2%.

Read more: Macy’s Strategy Shows Promise With Focus on Omnichannel Shoppers

Macy’s First 50 Initiative and Store Closures

Meanwhile, Macy’s completed its first year of its Bold New Chapter strategy, highlighted by an initiative known as First 50, referring to 50 of its store locations. Unveiled 13 months ago, this strategy aims to modernize its operations, improve customer experiences and open new growth opportunities. A central focus is to revamp 50 key stores and use them as prototypes for the next generation of Macy’s locations, a figure that is now 125 after company officials added 75 stores for 2025.

Macy’s First 50 locations delivered their fourth consecutive quarter of comparable sales growth, up 0.8%. The retailer closed 64 of 160 non-go forward stores, Spring noted, and plans to call for a total of 150 store closings by the end of fiscal 2026.

“Recent results illustrate this is the right strategy to return Macy’s to profitable growth,” Spring said. “We’re focused on delivering a better customer experience. We enter 2025 far stronger than we did entering 2024. We added 75 stores to our Reimagined environment, representing 36% of our go-forward strategy, invested in end-to-end operations, and increased our speed of delivery. We saw digital growth in the fourth quarter.”

First-quarter guidance calls for comp sales to decline 2.5% to 4.5%, with sales of $4.4 billion to $4.5 billion. For the full year, comp sales are expected to decrease 0.5% to 2.0% on sales of $21 billion to $21.4 billion, Chief Financial Officer Adrian Mitchell said.

“Our guidance reflects the heightened uncertainty of the environment,” Mitchell told analysts. “We don’t expect quarterly results to be linear. We must be realistic and prudent in our guidance.”

Macy’s is shifting focus to future growth through a smaller, more efficient store fleet while enhancing the omnichannel shopping experience, Spring said.

On top of its First 50 initiatives, company officials diversified merchandise assortments and leveraged its online marketplace to explore opportunities. Marketing efforts are aimed at balancing performance-driven strategies with brand-building initiatives, Spring added, particularly during peak periods.

Looking ahead, Macy’s plans to accelerate growth with initiatives like the luxury-focused Bloomingdale’s collaborations and the expansion of Bluemercury locations, along with new brand partnerships to fuel sales.

See also: Macy’s Struggles and Its Bold New Chapter: Can the Iconic Retailer Make a Comeback?

Consumer Caution in a Shifting Retail Landscape

“It’s good to remind everybody of the power of the Macy’s portfolio with 40 million active customers,” Spring said. “In moments like this, our portfolio is well positioned to navigate an uncertain environment. Our opportunity is to leverage our strength as a portfolio business. With the flow of newness, new marketing campaigns, expanded partnerships, excitement at Bloomingdale’s, there’s so much energy.”

This optimism comes amid a period of consumer caution, according to PYMNTS data. Consider 55% of shoppers earning less than $50,000 annually and 57% of those making between $50,000 and $100,000 have turned to more affordable retailers in response to rising prices. Even higher-income consumers are feeling the pinch, as 45% of those earning over $100,000 have also switched to cheaper options.

“The consumer health in our opinion remains very similar to what we saw in the latter part of 2024,” Spring added. “Consumers under pressure navigating food prices, the price of housing, but wanting to indulge at times on things that make him or her happy. I don’t think the consumer will feel a sense of relief in the short term. There’s impact to all levels of consumers. The affluent customer shopping Macy’s is just as uncertain, confused and concerned as to what’s transpiring.”