Consumers across the U.S. are presenting remarkably different shopping behaviors based on where they live and their attitudes toward COVID, according to Macy’s CEO Jeff Gennette.
“There is definitely the different psychology with suburban and the urban customers right now,” Gennette said.
The retailer’s latest quarterly results show that consumers are not fully comfortable shopping in physical stores, especially those in large urban areas such as New York City, while those in the suburbs are more at ease with the idea of shopping in physical stores. Case in point: Many Macy’s stores in suburban locations are performing better than 2019 levels.
“There are still pockets of the country where the stores business … is off, and it’s not correlated to vaccination rate, it’s really the psychology of those customers,” he added.
Another key factor that has put a damper on sales in large cities is the lack of international tourism that drives foot traffic for retailers. For example, Macy’s Herald Square flagship store in Manhattan is still seeing foot traffic below pre-pandemic levels, CNBC reported.
Looking ahead, Gennette expects stores in densely populated areas to make a recovery as workers return back to their offices. However, the spread of the delta variant is likely to impact the timeline as it is prompting companies to reconsider their return-to-office plans.
Macy’s shares were reportedly up 20 percent as of closing yesterday — a record one-day gain — as the company’s revenue topped analysts’ expectations. The retailer saw 5 million new customers in Q2, with 41 percent of those coming from digital channels.