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Department stores such as Macy’s Inc. (NYSE:M) are facing increasing competition from discount retailers such as TJMaxx and Target Corporation (NYSE:TGT). Customers are inclined nowadays to discount retailers leaving Department stores and malls struggling.

Discount retailers outperforming department stores

In the last quarter, Macy’s performed dismally, which is a reflection of how department stores are struggling. Macy’s executives have blamed warm weather and problems at malls for the uninspiring performance in the last quarter. The company has now lowered its holiday season expectations considering more people are shopping online and at standalone stores for gifts.

Macy’s reported a 3.9% decline in sales in stores that have been open at least for a year. According to its CEO Jeff Gennette the sales decline was steeper than anticipated. The company continues to face problems, especially at lower-tier malls. 

Department stores are trying to implement changes at their stores, but analysts indicate that it is not adequate. The changes department stores are making to enhance customer experience are incremental changes instead of having seeping overhauls. Discount retailers have been growing sales because of low prices, and they are forcing department stores to lower their prices to keep up.

Although Americans are still spending a lot on shopping, most are seeking bargains from discount stores. Generally, the most affected department stores are those situated in malls as standalone stores such as Target continue to boost sales.

Not all standalone stores are doing well

However, it is not true that all standalone stores are doing well. For instance, Kohl’s Corporation (NYSE:KSS), which has its stores from malls, has also been struggling. Its clothing sales have been waning as those of Target continue to grow. Michelle Gass, the CEO of Kohl’s, stated that there are several options for women out there. She added that Kohl’s stands for value, style relevancy as well as for casual apparel.

Target’s exceptional growth in clothing sales can be linked to its partnerships with the likes of Levi’s for exclusive collections. In the last quarter, the company’s online sales and at stores open for at least a year grew by 4.5%.

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