Macy's Debuts Second Market by Macy's Retail Center Site
Macy's is set to open its second "Market by Macy's" store on Friday, located in the WestBend lifestyle shopping center. This smaller, approximately 20,000 square feet store format, first introduced almost a year ago in Southlake, Texas, is part of a broader reimagining strategy unveiled by Macy's last February.
The new store will be merchandised with an edit of brands and items available at full-line Macy's stores. To enhance the shopping experience, the store will feature full and self-service checkouts, Buy Online Pickup In-Store (BOPIS) services, and offer same-day delivery with DoorDash. The merchandise will be tagged with a range of accessible prices.
GlobalData Managing Director Neil Saunders believes execution is critical for the new store format's success. However, he expresses concerns about Macy's ability to innovate and execute the new store format effectively. Saunders suggests that Macy's strategy might be "too little too late" and underwhelming. He advises Macy's to be bolder in its ambitions for the new store format.
Macy's has maximised learnings from the first store to create a scalable store format. The company’s broader turnaround effort, which includes store revamps and closures, shows that the first 50 reimagined locations have outperformed much of the chain. By early 2025, this program is expected to expand to 125 stores, now representing 36% of Macy’s 350 planned open locations.
However, challenges to executing this plan remain significant. Macy’s overall comparable store sales have not yet returned to growth, projecting flat to slightly down sales for fiscal 2025 despite the reimagined stores' success. The company faces the need for substantial capital and time to scale the reimagined store concept across its footprint, with economic uncertainty and shifting retail demand dynamics creating headwinds.
Broader market conditions include rising store fit-out costs, a cautious retail leasing environment, and competition from e-commerce, which further complicate expansion and refurbishment efforts. Macy’s is also contending with declining retail space demand and cautious leasing activity, which may impact its flexibility and costs in real estate strategy execution.
Despite these challenges, Macy's is joining other department stores in shifting its attention towards smaller stores in strip-style centers. These stores offer more convenient parking compared to sprawling stores in traditional malls, making them an attractive option for customers. As Macy's continues to refine and expand its "Market by Macy's" store format, it will be interesting to see how the strategy evolves and contributes to the company's overall turnaround effort.
[1] GlobalData Retail, "Macy's Reimagined Store Strategy Shows Mixed Results," 2022. [2] GlobeNewswire, "Macy's, Inc. Reports Fourth Quarter and Fiscal Year 2021 Results," 2022. [4] Retail Dive, "Macy's repurposes stores as office space, gym, and other uses," 2021.
- The new "Market by Macy's" store format, which includes enhanced shopping experiences, smaller size, and a focus on accessibility, is part of Macy's broader reimagining strategy.
- Neil Saunders, Managing Director at GlobalData, has expressed concerns about Macy's ability to innovate and execute this new store format effectively, suggesting they need to be bolder in their ambitions.
- Macy's is facing significant challenges in executing its plan for scaling the reimagined store concept, including rising store fit-out costs, a cautious retail leasing environment, competition from e-commerce, and declining retail space demand.
- As Macy's continues to refine and expand its "Market by Macy's" store format, they will be joining other department stores in shifting their attention towards smaller stores in strip-style centers, which offer more convenient parking compared to traditional malls.
