Departments stores struggling to get back to pre-pandemic levels

Department stores were once the great disruptors and kings of the retail industry. Over the last decades their share of the retail industry has diminished steadily. They were also one of the hardest hit retail categories during the pandemic.

Over the years the department stores have focused more and more on the Fashion & apparel categories. This was disastrous during the pandemic.

Since the pandemic the department stores have rebounded strongly on one and two year basis. However, in Q1/2020 March was already a pandemic influenced month. Thus tow year comparisons don’t give a full picture of the performance of the companies.

In one and two year comparison department stores have clearly outgrown the market and their discount competitor Target.

When one turns the focus to pre-pandemic Q1/2019, the performance is not so strong anymore. Only Nordstrom has been able to grow on top of the 2019 level. This is mainly because of the strong growth of their online business.

The share of online sales at Nordstrom has grown 31% in Q1/2019 to 39% in Q1/2022.

Target’s broad assortment is shown as a great moat against the traditional department stores. Target has been able to grow by 40,9% since Q1/2019. Compared to the best performing department store (Nordstrom) and its 3,7%.