Why are department stores failing?


May 3, 2021 | By RetailME Bureau

The once powerful department stores that anchored malls and streets around the world are now a failing concept.

From Debenhams to HoF, Macy’s to Barneys New York, and Sears to JC Penney, the list of department stores that have declared bankruptcy, shut multiple stores, or have been running in losses is long. And it’s not just Covid-19 or the e-commerce boom that can be blamed for it.

“The concept of department store is beginning to fail whether it is the UK high street, or 5th avenue in the US,” said Jayant Ganwani, CEO of Lals Group.

In 2011, US department stores employed 1.2 million employees across 8,600 stores, according to estimates from the research firm IBISWorld. But in 2020, there are now fewer than 700,000 employees in the sector, working across just over 6,000 locations. The pandemic saw more sales declines, lay-offs, and store closures so these number would’ve shrunk further now.

But why are department stores dying, despite the ease and convenience of the one-stop-shop that people once lauded?

“Department stores do not give the brands the identity that they want. Consumer brands have come back to realise that in a department store they don’t capture enough data, consumer’s journey, loyalty etc.,” he explained.

“In Dubai, every brand has a boutique of their own and they end up being present in a department store. Sometimes it’s counterproductive and duplicant.”

However, by far, department stores were the best collaboration between retailers. Considering the business model isn’t working anymore, the industry will have to think of new concepts and innovative ways to work together.

“I think we are going to see in the future where like-minded retailers that offer complimentary products to each other, collaborating to create larger retail experiential environments. I think a superstore that has complimentary products by three or four retailers would work,” he said.

“I think it would translate into better rentals for people, more staff efficiency, and common marketing platforms. You don’t need a marketplace for everything. If you have a good enough operator that has everything in a single journey, that would be idea,” he concluded.

 

 

Comments

comments

Previous Article Next Article

SHARE

YOU MAY ALSO LIKE /


Carrefour onboards female-led start-up The Zola Collective

Carrefour, which is owned and operated by Majid Al Futtaim in the 

Continue Reading

January 31, 2023 | By RetailME Bureau
A new branch of Waitrose comes up in Abu Dhabi’s Khalifa City

British grocer Waitrose has opened its newest store in Abu Dhabi’s Khalifa 

Continue Reading

January 25, 2023 | By RetailME Bureau
Its Netherlands Food Week at Al Maya Supermarkets

UAE-based Al Maya Supermarkets has kicked off its ‘Netherlands Food Week’ that 

Continue Reading

January 20, 2023 | By RetailME Bureau
Tesco announces price lock to support consumers amid inflation (PC: Andrew Parsons / Parsons Media)

British grocery retail chain Tesco has announced a price lock on over 

Continue Reading

January 13, 2023 | By RetailME Bureau
Union Coop renews ISO certification

Dubai-based grocery retailer Union Coop has successfully obtained the ISO 22301, an 

Continue Reading

January 12, 2023 | By RetailME Bureau
Spanish supermarket chain Mercadona announces salary increase amid inflation (PC: Mercadona)

Spanish omnichannel supermarket chain Mercadona has announced salary increase amid inflation that 

Continue Reading

January 3, 2023 | By RetailME Bureau
Choithrams partners with Rove Hotels to open 8 new outlets

Grocery retail chain Choithrams will open eight convenience stores across Rove Hotels’ 

Continue Reading

December 30, 2022 | By RetailME Bureau
Géant to open more than 20 stores in the UAE in 2023

Part of regional retail conglomerate GMG, Géant plans to open more than 

Continue Reading

December 23, 2022 | By RetailME Bureau
FMCG online sales growing by 68% in UAE and 58% in KSA

Online share in FMCG sales has been growing all over the world, 

Continue Reading

December 19, 2022 | By RetailME Bureau
Majid Al Futtaim Retail, Standard Chartered launch region’s first Sustainable Supply Chain Finance Programme

Majid Al Futtaim Retail, operator of the Carrefour franchise in the Middle 

Continue Reading

December 15, 2022 | By RetailME Bureau
GMG and Silal partner to support 1,100 UAE farms access local retail market

UAE-based diversified conglomerate GMG and Silal have signed a memorandum of understanding 

Continue Reading

December 12, 2022 | By RetailME Bureau
Lulu Group partners with Amazon expanding grocery offerings to online customers in the UAE

Abu Dhabi based grocery retail chain Lulu Group has partnered with Amazon 

Continue Reading

November 24, 2022 | By RetailME Bureau




f
Download Images RetailME Magazine