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Rich Man, Poor Man: Shoppers Go To Saks, Macy’s


Bargain-hunters felt the fear and shopped anyway, lured by department store price cuts in May. High-end store Saks Inc. and department store Macy’s Inc. both bucked the trend for weaker-than-expected retail sales, which shows that consumers responded to spring sales in Saks and – in Macy’s case – never-ending sales all year-round. Saks reported same-store sales up a staggering 20% in May, showing that those with more money in their pockets still shopped, while Macy’s had a respectable 7.4% uptick in sales, a strong performance for one of the nation’s mid-tier department stores. Both exceeded the 4.9% growth in overall retail sales in May, according to the 24 retailers tracked by Thompson Reuters. Gap Inc., the country’s largest apparel retailer, saw same-store sales down 4% in May.

But what does it all mean? Is this a case of extreme sales shopping? “The consumer is under pressure and mixed in with this stuff you have a few winners,” says Howard Davidowitz, president of Davidowitz & Associates, a New York-based retail consultant and investment bank. “We’ve just gone through the greatest capital markets in the history of the United States: 20% of the American consumers are doing phenomenal, which is reflected in luxury sales. The other 80% are wrecked. Wal-Mart has had eight consecutive declines in U.S. retail sales. Extreme dollar stores are terrific, but for 80% of Americans Wal-Mart is still expensive.” (A Wal-Mart spokesman says the store has a price-match guarantee. “The brand has been built on low-price leadership,” he says.) And the short-term economic outlook? Davidowitz says, “The worst has yet to come.”

Pay Dirt readers, do you agree with that assessment?


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    • Its no longer a question about if Howard is right.
      He continued to be correct.

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    • I can only comment on Davidowitz’s remarks by what I see – which is admittedly limited.

      I think he’s spot-on; though I hope he’s wrong regarding “the worst has yet to come.”

About Pay Dirt

  • Pay Dirt examines the millions of consumer decisions Americans make every day: What to buy, how much to pay, whether to rave or complain. Lead written by Quentin Fottrell, the blog examines these interactions, providing readers with news, insight and tips on shopping, spending, customer service, and companies that do right – and wrong – by their customers. Send items, questions and comments to or tweet @SMPayDirt.