Former Macy’s CEO On What’s Next For Brick And Mortar Retail

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Former Macy's CEO On What's Next For Brick And Mortar Retail
Former Macy's CEO On What's Next For Brick And Mortar Retail

Former Macy’s CEO Terry Lundgren expects the ongoing pandemic to continue to impact the retail industry well into next year, potentially leading to further uptake of online shopping and closure of more brick and mortar stores. 

The retail industry in the U.S. alone has seen the closure of more than 11,000 retail stores this year, with consumers avoiding physical store locations in favor of shopping online — a trend that has been particularly visible during this year’s holiday season. Cyber Monday, for example, saw record-breaking sales with consumers spending a stunning $10.8 billion. Meanwhile, sales on Black Friday were up by 22 percent. 

These trends are unlikely to abate heading into 2021, according to Lundgren, who served as the company’s chief executive from 2003 to 2017 and on the company’s board until 2018.

“We’re not done yet. … We’re going to learn even more when we get through the holiday season,” Lundgren told CNBC. “Retailers who have a weak balance sheet today aren’t going to get relief in January. It’s going to get tougher. When the volume of purchases drops dramatically after Christmas, the expenses remain.”

“This movie is not finished. I suspect we’re going to see more closings throughout 2021,” Lundgren said.

While this bears bad news for retailers, both big and small, there is light at the end of the tunnel for businesses that manage to keep their operations afloat. 

“They’re actually going to have an opportunity to grow again. That’s the upside, the green shoots, from that perspective of store closures,” Lundgren said adding that the market condition should start improving in the next six months.

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