The once-unshakeable pillars of American retail are facing a seismic shift, as the U.S. department store industry grapples with a 2.1% decline in revenue to $72.4 billion in 2023, a trend marked by widespread store closures and a fierce battle to capture digital sales.
Key Takeaways
- The U.S. department store industry revenue reached $72.4 billion in 2023, marking a 2.1% decline from 2022
- Macy's Inc. reported net sales of $23.9 billion for fiscal year 2023, down 5.1% year-over-year
- Kohl's Corporation achieved $17.5 billion in net sales in 2023, reflecting a 7.8% decrease compared to the previous year
- The average U.S. department store had 120,450 square feet of selling space in 2023
- Department stores operated 4,200 locations across the U.S. in 2023, down 3% from 2022
- Macy's shuttered 30 underperforming stores in 2023, reducing footprint by 2%
- U.S. department store industry employed 1.2 million workers in 2023, down 2.5% YoY
- Macy's workforce totaled 85,000 full and part-time employees in 2023
- Kohl's employed 74,000 associates across its operations in 2023
- Department store e-commerce sales hit $28.6 billion in the U.S. in 2023, 28% of total sales
- Macy's online sales grew 4.2% to $8.1 billion in FY2023
- Kohl's digital sales represented 24% of total revenue at $4.2 billion in 2023
- U.S. department store industry faced 152 store closures in 2023
- E-commerce competition eroded 15% of brick-and-mortar sales since 2019
- Macy's stock price fell 45% over 2023 amid sales pressures
The struggling department store industry saw falling sales and store closures in 2023.
Challenges and Future Outlook
- U.S. department store industry faced 152 store closures in 2023
- E-commerce competition eroded 15% of brick-and-mortar sales since 2019
- Macy's stock price fell 45% over 2023 amid sales pressures
- Kohl's shop-in-shops with Ulta boosted traffic 8% but sales flat in 2023
- Inflation drove 22% cost increase in merchandise for dept stores 2023
- Nordstrom family sold 10% stake for $2.1B to fund turnaround in 2023
- JCPenney bankruptcy legacy led to 20% debt reduction by 2023
- Supply chain delays impacted 35% of holiday inventory in 2023
- Dillard's outperformed peers with only 1% sales dip despite challenges 2023
- Saks Global merger valued at $2.65B to combat luxury competition 2023
- Theft and shrinkage cost dept stores $4.8 billion in 2023, up 7%
- 41% of consumers shifted spending to off-price retailers in 2023 survey
- Belk emerged from bankruptcy with $400M debt cut in 2023
- Labor shortages filled only 75% of open positions in peak season 2023
- Neiman Marcus refinanced $1.2B debt amid sales slowdown 2023
- Fast fashion brands captured 12% market share from dept stores 2023
- Hudson's Bay closed 10 stores in Canada due to underperformance 2023
- Mall vacancy rates around dept stores hit 12.4% in 2023
- Boscov's resisted closures, bucking 5% industry store loss trend 2023
- Future outlook projects 2-3% annual revenue decline through 2027
- Von Maur expanded to counter regional competition with 2 new stores 2023
- Sustainability demands led to 18% customer churn for non-eco brands 2023
- AI adoption lag: only 25% of dept stores using predictive analytics 2023
- Bergdorf Goodman faced 10% tourist drop post-pandemic in 2023
Challenges and Future Outlook Interpretation
The U.S. department store industry is simultaneously playing chess, whack-a-mole, and a desperate game of survival Jenga, where even a clever partnership or a rare profit is immediately offset by a plague of theft, inflation, and a customer who has already left the building for greener, online pastures.
E-commerce and Digital
- Department store e-commerce sales hit $28.6 billion in the U.S. in 2023, 28% of total sales
- Macy's online sales grew 4.2% to $8.1 billion in FY2023
- Kohl's digital sales represented 24% of total revenue at $4.2 billion in 2023
- Nordstrom digital sales reached $4.0 billion, up 7% in fiscal 2023
- JCPenney e-commerce sales totaled $3.6 billion, 24% of net sales in 2023
- 55% of department store shoppers used mobile apps for purchases in 2023
- Dillard's online channel generated $650 million in 2023 sales
- Saks.com sales exceeded $1.2 billion in 2023
- Buy-online-pickup-in-store (BOPIS) orders up 15% to 120 million in 2023
- Neiman Marcus digital sales at $1.1 billion, 22% of total in FY2023
- Mobile commerce accounted for 42% of department store e-sales in 2023
- Von Maur launched app with 500,000 downloads by end-2023
- Industry invested $1.8 billion in digital platforms in 2023
- Boscov's e-commerce grew 12% to $200 million in 2023
- Social commerce sales via Instagram/TikTok hit $450 million for dept stores 2023
- Belk digital sales $900 million, 24% penetration in 2023
- AI personalization boosted conversion rates by 18% in dept store sites 2023
- Hudson's Bay digital sales CAD 1.1 billion in 2023
- Voice commerce orders grew 25% to 2.5 million in dept stores 2023
- Bergdorf Goodman online sales $250 million in 2023
- AR virtual try-on features used by 35% of online shoppers in 2023
- Subscription box services from dept stores generated $300 million in 2023
- Cybersecurity incidents affected 12% of dept store websites in 2023
- Live-stream shopping sales reached $150 million for U.S. dept stores in 2023
E-commerce and Digital Interpretation
Despite the modern chaos of apps, AI, and virtual try-ons, department stores are clawing their way back by ensuring your online impulse buys are as immediate and omnipresent as your regret.
Employment
- U.S. department store industry employed 1.2 million workers in 2023, down 2.5% YoY
- Macy's workforce totaled 85,000 full and part-time employees in 2023
- Kohl's employed 74,000 associates across its operations in 2023
- Nordstrom had 68,000 employees in fiscal 2023
- JCPenney staff numbered 60,000 in 2023 after workforce optimization
- Average hourly wage in department stores was $16.45 in 2023
- Dillard's employed 30,500 people in 2023
- Saks Inc. had 15,000 employees across luxury banners in 2023
- Part-time workers comprised 62% of department store staff in 2023
- Boscov's employed 9,000 associates in its 49 stores in 2023
- Industry turnover rate for retail salespersons was 45.2% in 2023
- Von Maur staff totaled 7,000 in 2023
- Neiman Marcus Group employed 13,500 in 2023
- Department store managers earned median $52,300 annually in 2023
- Belk had 23,000 employees post-restructuring in 2023
- 28% of department store jobs were unionized in 2023
- Hudson's Bay employed 12,000 in Canada operations 2023
- Sales associates averaged 1.2 per 1,000 sq ft in department stores 2023
- Industry added 5,000 seasonal jobs for holidays in 2023
- Bergdorf Goodman staffed 1,200 in NYC flagship alone in 2023
- Female employees made up 68% of department store workforce in 2023
- Training hours per new hire averaged 32 in department stores 2023
- Executive roles decreased 12% industry-wide since 2020 to 8,500 in 2023
Employment Interpretation
The industry is attempting to corner the market on lean operations and part-time hours, but unfortunately, it's also cornering the market on high turnover and the subsequent decline in service that comes from expecting a $16.45-an-hour workforce to be perpetually excellent.
Revenue and Sales
- The U.S. department store industry revenue reached $72.4 billion in 2023, marking a 2.1% decline from 2022
- Macy's Inc. reported net sales of $23.9 billion for fiscal year 2023, down 5.1% year-over-year
- Kohl's Corporation achieved $17.5 billion in net sales in 2023, reflecting a 7.8% decrease compared to the previous year
- Nordstrom Inc. full-year net sales totaled $14.7 billion in fiscal 2023, up 1.2% from 2022
- JCPenney generated $14.8 billion in net sales for 2023, a slight increase of 0.5% YoY
- Global department store market size was valued at $1.2 trillion in 2023
- U.S. department store same-store sales declined by 4.3% in Q4 2023
- Dillard's Inc. sales rose 2.7% to $8.4 billion in fiscal 2023
- Belk Inc. reported $3.8 billion in revenue for 2023 amid restructuring
- Saks Fifth Avenue parent HBC posted $6.1 billion in retail revenue for 2023
- U.S. department stores holiday sales fell 6.2% in 2023 to $12.5 billion
- Boscov's Department Store chain sales estimated at $1.6 billion in 2023
- Industry average revenue per store was $45.2 million in 2023 for U.S. department stores
- Online sales accounted for 28% of total department store revenue in 2023
- Luxury department store segment grew 3.1% to $45 billion globally in 2023
- Sears Holdings remnant operations generated $1.2 billion in 2023 sales
- Von Maur private chain sales hit $2.1 billion in 2023
- U.S. department store gross margin averaged 35.4% in 2023
- Q1 2024 department store sales projected at $18.1 billion, down 1.8%
- Neiman Marcus Group revenue reached $5.1 billion in FY2023
- Industry EBITDA margin for department stores was 4.2% in 2023
- Back-to-school sales for department stores totaled $4.7 billion in 2023
- Bergdorf Goodman sales estimated at $500 million in 2023
- U.S. department store revenue per square foot averaged $320 in 2023
- Lord + Taylor revival sales at $300 million post-2023 relaunch
- Industry net profit margin stood at 1.8% for U.S. department stores in 2023
- Hudson's Bay Co. department store sales $4.2 billion CAD in 2023
- Elder-Beerman brand residual sales $150 million in 2023
- U.S. department store Black Friday sales dropped 8.1% to $9.2 billion in 2023
- Bon-Ton Stores legacy revenue estimated $800 million in 2023 operations
Revenue and Sales Interpretation
While the Titanic of retail (the global market) sails confidently at $1.2 trillion, the American lifeboats (individual chains like Macy's and Kohl's) are still taking on water with widespread sales declines and a grim 1.8% net profit, proving that merely staying afloat isn't the same as charting a successful course.
Store Operations
- The average U.S. department store had 120,450 square feet of selling space in 2023
- Department stores operated 4,200 locations across the U.S. in 2023, down 3% from 2022
- Macy's shuttered 30 underperforming stores in 2023, reducing footprint by 2%
- Kohl's average store size measured 89,000 square feet in 2023
- Nordstrom full-line stores averaged 140,000 sq ft, off-price Rack stores 25,000 sq ft in 2023
- JCPenney closed 12 stores in 2023, operating 650 locations total
- Global department stores numbered 15,800 outlets in 2023
- Dillard's operated 294 stores with average size 225,000 sq ft in 2023
- Average department store inventory turnover rate was 3.8 times per year in 2023
- Saks OFF 5TH averaged 20,000 sq ft per location across 100+ stores in 2023
- U.S. department stores renovated 15% of their fleet in 2023, investing $2.1B
- Boscov's maintained 49 stores averaging 150,000 sq ft in 2023
- Self-checkout lanes installed in 65% of department stores by 2023
- Von Maur operated 37 stores with luxury boutique designs averaging 160,000 sq ft in 2023
- Industry average store sales per employee reached $185,000 in 2023
- Neiman Marcus had 36 stores totaling 3.2 million sq ft in 2023
- Department store parking spaces averaged 1,200 per location in suburban U.S. sites 2023
- Hudson's Bay operated 85 stores in Canada averaging 120,000 sq ft in 2023
- 22% of department stores implemented curbside pickup in 2023
- Belk ran 287 stores post-bankruptcy with average 100,000 sq ft in 2023
- Mobile POS systems used in 45% of department store registers in 2023
- Industry store closure rate was 4.1% in 2023, highest since 2020
- Bergdorf Goodman NYC flagship spans 620,000 sq ft across two buildings in 2023
- Average lease renewal rate for department stores was 78% in 2023
- Lord + Taylor pop-up stores averaged 15,000 sq ft in 2023 pilots
Store Operations Interpretation
While they’re still learning to do more with less space and fewer stores, the venerable department store is stubbornly refusing to be a ghost in the retail machine, betting that strategic shrinkage, tech investments, and sheer square-footage grandeur will keep it from becoming a museum piece.
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