Macy’s Brick & Mortar Sales -35%, Digital +21%. Walmart Online +69%, US Ecommerce +32%. Online Furniture, Grocery, Clothing Sales Explode as Brick & Mortar Melts Down

44% of Macy’s total sales are now ecommerce. Mall landlords, even the biggest, are turning malls over to their lenders.

By Wolf Richter for WOLF STREET.

Macy’s, when it reported earnings this morning, confirmed its own brick-and-mortar meltdown, and it showed the benefits of Macy’s decision years ago to go after ecommerce in a serious way, knowing that its brick-and-mortar stores – despite what it was telling the public – were on the slow way out, attested to by its countless and ongoing store closures. The Pandemic accelerated that trend by a quantum leap. But it’s messy and tough, and Macy’s is losing the edge in its digital sales growth.

Macy’s [M] ecommerce sales in the fourth quarter, ended January 31, rose by 21% year-over-year, to $3.0 billion, to account for 44% of its total net sales. Ecommerce sales are those sales that originated online, regardless of how the merchandise got into the home, whether through delivery or pick-up at the store.

But its brick-and-mortar sales in Q4 collapsed by 35% to $3.8 billion, accounting for only 56% of Macy’s total sales. At this rate, brick-and-mortar sales will be down to less than half of Macy’s total sales by the end of this year. The downward spiral has now picked up critical mass.

And total sales in Q4 fell by 19% year-over-year to $6.8 billion, as the increase in ecommerce sales could not make up for the decline in brick-and-mortar sales.

That Macy’s ecommerce sales were already 44% of its total sales, a huge feat, shows two things:

  • Years of investing heavily in ecommerce, including building out its fulfillment infrastructure, rather than counting on the miraculous rebirth of its brick-and-mortar stores.
  • The plunge of sales at its brick-and-mortar stores, which increased the share of ecommerce sales within total sales.

But Macy’s digital sales growth of 21% is relatively weak in the Pandemic era of ecommerce.

Walmart [WMT] – it got ecommerce religion way too late and inexplicably gave Amazon two decades of head start but in recent years has become deadly serious about it – reported that Walmart US ecommerce sales in Q4 soared by 69% and Sam’s Club sales jumped by 42%.

Bed Bath & Beyond [BBBY] reported that in the quarter ended November 28, its ecommerce sales soared by 75% year-over-year, accounting for about one-third of its total sales, as sales at its brick-and-mortar stores plunged, and overall sales fell by 17%.

Best Buy [BBY], which benefited from work-from-home and learn-from-home equipment purchases, hasn’t reported Q4 yet. But in Q3 it reported that online sales soared by 174% year-over-year to $3.8 billion, nearly tripling from $1.4 billion a year earlier, and accounting for 35% of its total sales.

Target hasn’t yet reported Q4 either, but in Q3, its ecommerce sales soared by 155%.

The Commerce Department reported last Friday that US ecommerce sales – sales by pure ecommerce players as well as sales by the ecommerce channels of brick-and-mortar retailers, such as Macy’s – soared by 32% in Q4 compared to a year earlier, to $245 billion, not seasonally adjusted, accounting for 15.7% of total retail sales:

In terms of dollars, the last three quarters – the Pandemic quarters – show the accelerated shift to ecommerce sales with gigantic year-over-year jumps in the range of $55 billion to $61 billion, including by $60 billion in Q4:

But total retail sales include the notoriously online-resistant sales at new and used vehicle dealers, grocery and beverage stores, and of course gas stations. Together they account for over one half of total retail sales. So the remaining brick-and-mortar stores, accounting for less than half of retail sales, have caught the brunt of the shift to ecommerce.

This is most painfully the case for department stores, once an iconic American institution. This is the 20-year progression of the demise of department stores that has accelerated in 2020 and is closing in on completion:

Some Pandemic Ecommerce Winners.

The Commerce Department started releasing “experimental” data last year on select categories of ecommerce sales, going back to 2019. This data is illustrative: it shows just how much certain categories of sales, including sales that were long considered very resistant to ecommerce, have moved to the internet.

Ecommerce sales of grocery and beverage stores have nearly quadrupled since Q1 2019, to $7.3 billion, after ineffectually trying for years – including efforts by Safeway, Amazon, and Google – to get Americans to buy groceries online:

Ecommerce sales of motor vehicle and parts dealers rose by 42% since Q1 2019, to $13 billion, with a concentration on used vehicles, including by several online-only used vehicle retailers, such as Vroom and Carvana:

Ecommerce sales of clothing and accessories have more than doubled since Q1 2019, to $10 billion:

Ecommerce sales of furniture and home furnishings have also more than doubled since Q1 2019, to $5 billion:

The biggest impact of this shift to ecommerce is on commercial real estate, two ways: Industrial properties, such as warehouses, fulfillment centers, and delivery centers, have become a red-hot segment. But retail properties, particularly malls with department stores as anchors, sinking into the mire, with mall landlords defaulting on their mortgages and letting the malls go back to lenders.

This includes the biggest mall landlord in the US, Simon Property Group, which is becoming a prolific jingle-mailer to dump its malls. Holders of CMBS eat the losses. ReadLargest US Mall Landlord Simon Property Group Sent Jingle Mail to Deutsche Bank Which Foreclosed on Mall, But Got No Bids

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  135 comments for “Macy’s Brick & Mortar Sales -35%, Digital +21%. Walmart Online +69%, US Ecommerce +32%. Online Furniture, Grocery, Clothing Sales Explode as Brick & Mortar Melts Down

  1. MiTurn says:

    My daughter-in-law, who lives next door to me, gets a freakin’ UPS delivery every day. I swear…

    • RightNYer says:

      As Monkey says, “United Shoppers of America.”

    • K says:

      It might not be a bad idea to load up on whatever you need right now. We will soon be in even more “interesting times,” not fun times, mind you, but emotional and interesting ones: like the Titanic sinking. (I, for one, am finding that dystopian stories are not fun when you are suddenly living in one and cannot get out.)

      Michael Burry just predicted hyperinflation as in Weimar Germany. The nerve! That is exactly what I predicted and said a while ago on this very site. IF he is a visitor to this website, he should at least give me credit. :) LOL.

      However, he is wrong: it will not be Weimar-style, genteel, hyperinflation. It will be rough, Zimbabwe-style, depression/recession with a side of economic paralysis. We would be lucky to only have Weimar-style hyperinflation with most goods and services still available, etc. That is not likely.

      I will no longer make comments referring to the “little visitors” that are with us, ok? However, too many new little visitors all over and the whole US shebang goes kaput. I do not know how to be more delicate than that for your gentle sensibilities.

      Stock up but leave the toilet paper alone, people! It is bulky and not edible.

      • RightNYer says:

        Little visitors?

        • K says:

          What has kept you out of dine in restaurants, if you are wise and
          now, its foreign relatives. (We have little idea or knowledge about its US-grown relatives.)

          However, fundamentally, the US stock market was in fantasyland for years and kept up only by unrealistic, low interest rate manipulation by the banksters’ “Federal” Reserve. The crash was coming for a long time but the “FED” is slowly losing control.

          Nationalize all banks, which now need trillions in bailouts AGAIN! Enough is enough.

      • WyleeEconomist says:

        We could stop ‘little visitors’ today.


        If corrupt business people like Trump stopped paying immigrants to come into the US to avoid paying fair american wages, we could stop the problem today.

        H1B’s should be converted to blind auction. If companies claim they cannot find American talent for any price… make them put their money where their mouth is.

        As for the economic drag of undocumented immigrants… They are denied almost any services. They pay taxes without representation or benefit.

        The real leeches are the organizations reaping vast rewards from doing business in American while offshoring their profits and labor.

        • Felix_47 says:

          Undocumented workers are a lot more intertwined into the US than you think. My kids are in a school in LA and 75% of the children are children of undocumented. And the LAUSD budget is huge and add the pensions it is even larger so those kids are getting a 30,000 per year benefit now. Many of the kids have a mother who is legal and a father who is undocumented or vice versa. There is no firm line between them. All of them get free health care from MediCal. Average per capita cost is 8000. No employers are paying the money and real costs needed to have these workers in a high cost society. The employers are sucking the tit of Uncle Sugar…..the only way to make a profit in the US today. Amazon, government motors all of them. Essentially, there is no such thing as what used to be called an illegal alien. Management of immigration from south of the border has been absent for many decades. The solution may well be to eliminate the border and integrate Mexico and Central America and maybe Haiti and Cuba into the US. Our founding fathers considered annexing Haiti and Cuba but held off because we needed European allies against the English. Then the US would have the benefit of the land and natural resources and US unions could organize the auto plants in Mexico where US cars are made with 2 dollar per hour labor (according to Wolf Street). Demographically the US is Latino except for the minority Blacks and ageing whites. The problem is that the oligarchs on both sides of the border like it just the way it is so they can maintain wage suppression. With integration and extending the 5 Freeway to Cabo San Lucas with US property law can you imagine the economic boom? My guess is that it will happen anyway in 100 years as these countries depopulate due to global warming and poverty. Already Michoacan is largely empty except for old people. Most of the population, especially the young, are in the US now. Some of the other states are showing similar signs of abandonment as well.

    • Island Teal says:

      Don’t feel bad. I live on a culdesac road and between fedex,amazon and ups there are on average 2-4 of each service delivering every day.
      How much crap can people order that makes all these deliveries necessary ??

      • Cas127 says:

        Well, if those include grocery food deliveries, then it really isn’t crap.

        Well, not at first, anyway.

        The broader point is that various household necessities (bulky paper towels and toilet paper, large orders of canned goods, large orders of storable food like pasta/oatmeal/peanut butter/etc) are now being integrated into the online ordering/delivery world.

        And that is not even including fresh grocery deliveries via Instacart, etc.

        I think this was the very point that Wolf was trying to make.

    • Old Sailor says:

      My neighbor across the street is the same way. UPS, FedEx, Amazon and USPS are at his house several times a week.

    • Morty Mc Mort says:

      If Stores, which used to represent the Majority of Revenue..
      Decline Massively…
      If E-Comm which was a Small Portion of sales historically..
      climb.. Massively..
      Could we expect that the NET effect is actually a Substantial Decline in NET Revenue and Profits??
      Or is my math Racist?

    • Mira says:

      In my immediate area in the street a while ago, the delivery van came & went all day, it looked like a Christmas run.

  2. timbers says:

    A lot of near minimum wage jobs were lost with BB meltdown. R’s have countered the $15 min with a $10 min + mandatory E-Verify for all works to be legal.

    Gonna take a guess that an actual mandatory E-Verify for all US workers would do more to raise wages than a $15 min by 2025.

    • Apple says:

      E-Verify would not apply to agricultural workers.

      • timbers says:

        If true, the “all workers” in the article is not correct.

        • Harrold says:

          E-verify including agricultural workers would cripple farmers in the Southern states + California.

          Cotton knows where his base is.

    • Stephen C. says:

      Maybe the R’s counter offer is a threat to get all the corporate donors calling up the Dems to stop all this crazy talk of a minimum wage. I’m betting this threat will work. I really doubt that E-verify with any teeth would ever see the light of day.

      • Mira says:

        Man is still morning the abolition of slavery, holding on to the last treads for dear life.
        “Ah the good ol’ days.”

  3. Bobber says:

    Why would Target’s on-line sales be so hot? It’s just a bunch of junk, and he prices aren’t great. Maybe it’s the pharmacy?

    • timbers says:

      Just one small reason:

      Pre-Covid Barnes & Noble did predicable periodic 50% sales on Criterion blu rays. Not anymore, it doesn’t have the stock (probably because it doesn’t have the $$). So Barnes & Noble sales have disappeared.

      Target has filled the void with periodic 3 for 2 sales, essentially replacing Barnes & Noble.

    • Ray Cornwall says:

      Curbside pickup is a strong program for Target. In some areas, it’s a great place to buy groceries. I’m sure that’s a winner for them.

      • Cas127 says:


        Excellent pt about curbside pickup…it likely is getting counted as online sales…but people tend to associate online with home delivery only.

        Curbside is likely a huge, discrete universe…especially for food.

        • Wolf Richter says:


          If you read the article, you will find that an ecommerce sale is a sale that is originated online, regardless of how the merchandise enters the home, whether through delivery or pickup of some sort (at a store, an Amazon locker, or whatever).

          In other words, if you buy something online it is an ecommerce sales, even if you decide to go pick it up at your Amazon locker or curbside.

        • keppered says:

          As wolf wrote:
          If you read the article, you will find that an ecommerce sale is a sale that is originated online, regardless of how the merchandise enters the home, whether through delivery or pickup of some sort (at a store, an Amazon locker, or whatever).

          In other words, if you buy something online it is an ecommerce sales, even if you decide to go pick it up at your Amazon locker or curbside

          I add the period.

          Reading the article you show is missing the true objective of your argument.
          It is impossible to collect true and accurate data from any online sale venue and I beg you to differ?

    • Javert Chip says:


      Ok, I’ll play your game: I’m guessing it’s tens of millions of Target shoppers who don’t agree with your description.

      Do I win a prize ? What’s my prize?

      • Bobber says:

        Yes, that’s obviously the case. I’m trying to understand why, because I don’t see the value there.

        If I had to guess, I’d say some people find it clean, organized, well lit, and parking is decent. So the shopping experience is driving it, not the products or the pricing.

        I own Kohls stock, so trying to understand what makes retail successful. I don’t see much difference between Target and Kohls, aside from the grocery business.

        • Harrold says:

          Kohls has coupons and more coupons and even more coupons.

        • Cas127 says:

          I find Kohl’s pricing significantly worse and Kohl’s doesn’t offer food.

          Target/SuperTargets offer some/a lot of food and the prices are within shouting distance of Walmart and competitive with some lazier supermkts.

    • roddy6667 says:

      Target benefits from its “shabby chic” image, and attracts buyers who would not be caught dead in Walmart.

      • Bobber says:

        Yes, that’s obviously the case. I’m trying to understand why, because I don’t see the value there.

        If I had to guess, I’d say some people find it clean, organized, well lit, and parking is decent. So the shopping experience is driving it, not the products or the pricing.

        I own Kohls stock, so trying to understand what makes retail successful. I don’t see much difference between Target and Kohls, aside from the grocery business.

        • Petunia says:

          I chose Target over Walmart because Walmart’s reputation as an employer is terrible and I don’t want to support them with my spending.

          I cut out cable, not because I couldn’t afford it, but because I don’t want to support the agendas of the left with my spending.

          Between Target and Kohls, I would prefer Target for variety and convenience. Also Kohls does a lot of coupon promotions and that pisses me off. I don’t want to be in line with someone getting a better price than me on the same item.

        • RightNYer says:

          Petunia, both Walmart and Target propagate leftist ideas, especially with respect to guns.

      • RightNYer says:

        Which I don’t get, because I don’t find the clientele in either to be that different.

        • Cas127 says:

          Kohls tend to be sited in somewhat higher income zip codes than Targets.

          Personally, I’m put off by Kohls over-pricing.

          Give me my shabby, price smart hoi polloi and keep the empty ego gestures of over pricing.

        • RightNYer says:

          I meant between Walmart and Target.

        • VintageVNvet says:

          for many many years, the go to answer is, “Target is for folks who are willing to pay a little bit more so they don’t have to go to Walmart.”
          been to both, more than I would prefer,,,, and the only delta seen is that Target does a lot worse on restocking fairly frequently: WM is usually mostly restocked in all areas by Tuesday noon.
          Target is frequently out of stock, without, so far, any rational basis…
          (Disclaimer, own no stock in either co, or any other supplier of either as far as i know.)

      • Mira says:

        When I was a 15, I was afraid to go into Myer Bourke St Store Melb. CBD.
        I went across the road to Coles instead.
        Then there was Georges in Collins St. one just walked past & got a thrill.

  4. Petunia says:

    It’s been years since I shopped at Macy’s.

    Was at an outlet place today, some closed stores, not busy at all.

  5. BuySome says:

    Oh, joy. It doesn’t matter when the roof collapses as long as you have replaced the walls with a new building material. Just throw a plastic givernment tarp over everything and that should support the weight of the snow of debt falling from the sky. Did we just discover the definition of delusional? Thank God the whole foundation is floating on a massive rice patty!

    • Mira says:

      Victoria Australia: 9NEWS “because until we hit our vaccination targets restrictions are here to stay” ..

      JENNIFER WESTACOTT .. Business Council of Australia .. “As more & more Australians get vaccinated,
      WE RELEASE MORE & MORE OF THE ECONOMY [a conspiracy to en/force upon the public]
      & eventually we will open our country up to international activities.”

      BCA members list are the top corporations in Australia .. a confident bunch hey .. it could make one suspect that the Australia Federal & State governments are underwriting all corporate debt until further notice .. which could be a real long time.
      Can the Australian government afford this loyalty to the leading corporations ??
      The keyboard’s are furiously printing loot to accommodate this authoritarian mind set.
      The corp’s too big to fail in Australia.

      • Mira says:

        What does this mean ??
        And who is this old bag Jennifer Westacott anyway.

        • Mira says:

          Economic Sustainability.
          With hard earned tax payer dollars .. OUR MONEY .. the supermarkets were shut down & we were not able to purchase .. & yet our hard earned dollars were still delivered to these venues.

      • Mira says:

        we’re all going to end up in the Sh?t House aren’t we.

  6. Ron says:

    Malls have been dinosaurs for 50 years in my area just built bigger as aging malls became useless no traffic let’s talk expenses lease management utilities employees theft insurance taxes u have to be a idiot to think malls can compete only reason they were built is because of tax code grow build bigger or pay taxes any business person knows expand or die

    • MiTurn says:

      We have one mall in our county and it’s, like you described, a dinosaur. No interior tenants left with the demise of JCP (except for the county DMV office). Some space has been converted to accommodate tenants who want a separate exterior entry/exit. So now we have a Dollar Tree and a Petco replaced the Sears. The movie theater on the end is long dead.

      It’s freaky to go inside. For lease/rent signs everywhere.

      “It’s dead, Jim…”

      • PPTdoesNotExist says:

        They are turning the old Sears into what looks like offices, condos, or apts here in Puget Sound (Alderwood Mall)

    • Javert Chip says:


      Your computer keyboard has punctuation keys. They’re there for a reason.

    • Thomas Roberts says:


      Don’t know about your area, in general I would say 20 years ago is when malls started to decline. The 2008 recession was when substantial decline accelerated. Definitely not 50 years for most.

      Employees theft is probably not worse in a mall compared to other locations.

      Some malls could do well, IF they managed to be well rounded and reserved a certain number of stores for certain types of things like sports, groceries, electronics, toys, and stuff like that. Services like Haircuts and tattoos are iffy. Malls of a certain size and in bigger metros or serving a large area could do well if run well. Just like other stores (especially Amazon) mall stores are full of low quality items. Luggage that breaks easy, laptops that might not last as others in same price bracket. Almost any large variety mall, Walmart, or online store like an Amazon competitor could easily succeed, IF they make a commitment that everything in that shopping place is the best quality for the price.

  7. Paulo says:

    Here’s a problem with E commerce.

    My CC was compromised for the 4th time in about 5 years, and I hardly ever use it!! Ever. I use it specifically for the occasional online purchase. Luckily, we review the snail mail paper trail sent to us every month and try and discern the exact purchase with the stupid legal name of the vendor from point of sale.

    I don’t even use the CC for gas anymore, and never for meals, groceries, liquor, etc. Furthermore, there is now a plethora of spam calls from a Visa phishing scam hack…always around supper time, and I got rid of my Visa 40 years ago? Luckily, our bills are done directly through the credit union, and not linked to a CC or we would have to deal with all that nonsense.

    I’m about one step away from using cash for everything and giving up on online.

    As I told the Mastercard security rep, “No, I did not rent a pay per view TV movie from Telus in an Edmonton hotel” (porn). And, “No, I will not phone Telus and reverse the charge, that’s your job. Have you ever phoned Telus and been put in voicemail hell? Remove the charge and send me a new card”. And now that will end up requiring more voicemail, holds, and a password change.

    Tomorrow, buying auto parts and lumber. Cash for the parts and debit for the lumber. Nothing online.

    • Javert Chip says:


      Calm down. Take 2-3 deep breaths.

      Now here’s a potential, peaceful solution for your CC. I don’t know about Canada, but the vast majority of US banks offer to text you every time your CC is charged (you may also adjust the $ notification threshold to ignore purchases under, say, $10).

      I have 3 very diverse CC: Wells Fargo, Fidelity Investments and Synchrony Bank (Amazon). Any one of them will text me within 30-60 seconds of a purchase.

      • char says:

        Real problem is with the American payment system. Those compromises should not happen. Tech is there.

        • Javert Chip says:


          What the hell are you trying to say with that post?

        • char says:

          CC is comprimised is an American story. You wont hear in other countries because their payment system is modern. American payment system needs to be updated.

    • Mark says:

      Wow I thought this stuff only happened to me. Every time I go to check my online access to my bank- it’s been shut down for “security issues”. Have had to go through the insane telephone contact with my bank to restore it 4 times. Now I’m just leaving it down and going paper statement .

      Same with my access to Amazon Visa card – it’s down again- gonna go paper statement there also. Amazon itself seems to have massive security issues constantly- and they NEVER cop to it. They tell you your password etc. is incorrect- and make you change it like it’s your fault, with no admission that it’s their crummy security causing it every time.
      Thinking about buying everything on E-bay – No fan of Bezos here ….

      P.S. I think my G mail is screwed again …..

    • Jos Oskam says:

      Had similar problems here in France. Exacerbated by the fact that French banks tend to block your cards immediately at the smallest sign of overdraft, or anything else they deem out of the ordinary.

      Switched to that pal that pays for me, if you see what I mean. Coupled this to a bank account that never has a huge amount on it and allows no overdraft. Haven’t had a problem since. I live in the sticks and order lots of stuff online so hassle-free online payment is important to me.

      I do not have shares or any other interest in any payment company, just thought this experience might be of some use to you.

    • roddy6667 says:

      My Amex card emails me within a few seconds of swiping my card. My phone chines in my pocket and I know the card is being used. You can probably get this notification on any card. I use a Microsoft email addy and have the Outlook app in my phone for instant notification. It can also handle non-Microsoft email addresses.
      No need for snail mail and weeks old information.

    • Swamp Creature says:


      I had my AAA Visa card hacked 4 times. Learned my lesson the hard way. Now I buy a $500 gift card at the supermarket and use it to purchase items on-line.

    • Swamp Creature says:


      Had the same problem as you.

      This is what I did to mitigate it.

      Pay cash for groceries, restaurants, haircuts, lawn man, hardware stores, bird food etc.

      1. One credit card for gas (1k limit)
      2. One for business expenses
      3. One for periodic monthly billing items
      4. One (gift card) for on-line purchases
      5. One store credit card (Home Depot)

      If one of these gets compromised it doesn’t take the whole ship down with it.

      If you travel, use travelers checks.

      Have two checking accounts. Use one for monthly routine bills. Keep a minimum bal. The other use for big ticket items.

    • Dave Kunkel says:

      I pay cash for everything bought in person. For online purchases I use a virtual credit card with a $ purchase limit and an expire day of one month in the future.

    • Cas127 says:

      Personally, I’ve had much worse experience with CC physical swiping data theft.

      Especially about 5-6 yrs ago, before CC chip embedding. There was a 6 month period where I had two cards’ data stolen twice each.

      Went to heavy cash use and the card chipping has helped too.

      Are your cards chipped? I kinda thought it was universal now, but maybe you have to request it.

      If the theft is from physical swiping, the same local bad actors will hit you over and over again (low paid retail checkout personnel/hidden readers)…but it is easier to hunt/narrow the points of failure down.

  8. Rumpled Bemused says:

    Ecommerce is a joyless experience. I purchase locally whenever possible as I would rather that our small downtown doesn’t become just empty shops and takeout restaurants. However, my options are becoming increasingly limited as inventories at our brick and mortars are falling.

    As a hobbyist, I’m going to miss the local guitar, golf, and (insert your hobby of choice here) shops. They were community centers for the like minded. Also, some purchases are tactile for me. The ability to demo a number of comparable products side by side is something I will definitely miss, or I will have to travel to visit shops that will still offer that kind of experience.

    • timbers says:

      You have a point. In the eighties and nineties I very much enjoyed going to antique/junk shops sometimes with friends. What every your “hobby” – collecting McCoy apple cookie jars and pottery or more expensive items – the trill of hunting for a rare find or a bargain and sometimes finding it was palpable.

      Online has none of that. It’s solitary, all business, and click.

      • Xabier says:

        As many of us have discovered during lock-downs, it’s a miserable way to shop, when there is no other option, and to live.

        I am hoping that ‘education’ through screens at home also acts as an aversion therapy for the young, and that they may start to see that the 5G – enabled digital prison is not a desirable outcome.

        • Rumpled Bemused says:

          Hell is other consumers. They define price, availability and experience. Their poor decisions are exacerbated by easy credit.

    • Randy Rogers says:

      Those Retailers that know what they are, have Service, Selection and Professionalism, can survive, it is an evolution, the same that saw Catalog Showrooms and Discount Stores threaten B&M, consolidation through weakness eroded the Department Store Model and what had clearly defined segments remaining be it Neiman’s, Sak’s, Nordstrom, Macy-Dillard, or Penny and Sears, through their own errors failed and in the concept that was the Mall, eroded the destination and experience. What was a Retail REIT will hybrid to a Residential REIT. The other 50% however is where the Business can be recaptured from the vanquished and against Boutiques both B&M and Digital, by mirroring the Brand demands with Personality and delivering the shopping experience. The 1980’s-’90’s ceded to consolidation and mismanagement to the new millennia, the springboard is here for those who accept the challenge!

      • char says:

        You are blaming the retailers. I think that is wrong. If 90% of your market choose a different outlet than a lot of your type of stores have to go. Some because they are badly run but most just because they are unlucky.

  9. Ray Cornwall says:

    I’m not a Macy’s shopper. But my 74-year old mom is, and she even uses her iPhone to pick out what she wants, and then has me place the order. Whatever they’re doing, they clearly know how to market to older people who may not be digitally savvy, and that’s significant.

    Everyone assumes that Amazon is untouchable when it comes to ecommerce, but I think there’s some dents in their armor that a smart company can use to pick up market share. Accessibility is one of them. Inventory control is another. My mom knows that if she buys from Macy’s, she won’t get a knockoff. That’s significant for her.

    • Carl says:

      Mr. Cornwall,

      We always check for competing products to Amazon.
      Carefully copy their description of the item, “4X8 widget with side drawer”. Enter that term in Google, or Duck Duck Go, the privacy search engine. Very often, a direct vendor website will pop up, with a better price and sometimes even a live human being who answers the phone. Don’t assume Amazon has the best prices.

      • Cas127 says:

        Amazon stopped competing on price about 4 to 5 years ago.

        It is crystal clear when you repeatedly buy goods with lower unit prices.

        A lot of Amazon product categories have a sort of continually creeping/stair step floor price…Amazon drives this by jacking the various fees charged to third party sellers.

        5 yrs ago there was a huge supply of $4 used books on Amazon.

        Then, within a month or so, $5.50 became the new floor more or less.

        Walmart does sorta the same thing…very few delivery capable food goods are priced under $3 per unit (or, really, $4).

        Every once in a while bulk orders get excellent pricing at Walmart (8 lbs of pasta for $5.14, vs $1.50 for 1 lb in supermkts) but Walmart too protects itself by having de facto pricing floors.

        And the Walmart 3rd party seller universe is much less aggressive (downright price goofy at times).

    • char says:

      Amazon has two problems.

      It needs to show a profit the moment e-commerce stops growing.
      It needs to deliver in the whole USA. regional is cheaper

      • Javert Chip says:


        PROBLEM #1) YE 2020 financials for AMZN:

        Revenue: $386B
        Net Income: $21B (5.4% of revenue)
        CapEx: $40B

        This is a non-problem: If eCommerce stopped growing(?), Bezos could chop CapEx 50% and double profit margin to a hellaciously high 10.8% of revenue

        PROBLEM #2) What do you mean “regional is cheaper”? So you’re proposing to deliver to only 1 region in the USA?

        AMZN has over 110 fulfillment centers (aka: warehouses) all over the country to reduce delivery time & cost – everywhere in the USA is “regional” for Amazon.

        Based on your financial consulting on PROBLEM #1 & #2 (above), I’d recommend keeping your day job.

        • Cas127 says:


          The CAPEX cut technique might work (but where is CAPEX really going to right now…are we sure it is all in retail supply chain vs. Space Cadet Camp Projects?).

          But people will wake up to the fact that Amazon is not really the price leader online anymore.

          (And the Amazon navigation experience, never top shelf, is deteriorating as pmt for ad/pdt placement is really becoming annoying as hell…”also bought” should read “over priced”).

          The internet tremendously facilitates price comparison.

          Amazon could get pecked to death by a thousand ducks…much more tightly focused online retailers offering better prices. Especially if somebody like Google offered universal checkout (duplicating Amazon’s economies of scope).

          Amazon’s huge revenue surge this yr was a pandemic driven fluke…we’ll see quarter by quarter this yr if they can even hold revenue flat.

        • Javert Chip says:


          Interesting point on the CapEx. FYI: AMZN (Blue Origin) just got “de-selected” by the USAF.

          All eCommerce buyers are a little different: I don’t ignore price, but my focus is on selection, availability and delivery time.

          I do price shop for larger ticket items ($200-300), but have generally found AMZN to be competitive.

    • FROMKS says:

      >My mom knows that if she buys from Macy’s, she won’t get a knockoff. That’s significant for her.

      Same reason I stick with niche sites for hobbies (OpticsPlanet for red-dots).

  10. 2banana says:

    Tiny data point.

    Went to the King of Prussia Mall, PA recently. This is the nicest and largest mall on the east coast and run by Simon Property Group. Nearly dead for almost a year.

    Went to the Borgata Casino in Atlantic City the same week. Crowded and hopping. Folks spending money like they got stimulus checks coming out the wazoo.

    So…split decision.

    • Wolf Richter says:

      Gambling is in. Look at bitcoin, stocks, Robinhood, the whole bit. Some folks still go the actual casino to get that rush.

      • MCH says:

        No way, Wolf, and risk the Rona? We can do that in front of our screens just fine, thank you.

        In fact, with e-commerce, delivery on demand, and all the other digital goodies that is afforded to the masses… at least the ones who can still afford it thanks the stimmies and eviction moratoriums, we are well on our way to becoming the fatties in the world of Wall-E, or is it we’re well on our way to becoming the Elois… in which case, I have to wonder, who are the Morlocks here.

        • polecat says:

          @jack, Zuck, Jeffery, billyboycardigan, etc … and a host of other BigProdigressive bone-splitters. Does that help.

          p.s. – avoid ALL of their forbidden fruit, or you too will be served a roundup!

      • ru82 says:

        Now kidding. Go read stocktwits. So many of the users online profiles said they joined in 2020.

        They are all experts now too since it has been so easy to buy the momo stocks and see terrific gains. They are reading and blurting out technical indicators and forgetting fundamentals eventually mean something.

        • Mark says:

          “forgetting fundamentals eventually mean something.”

          Not when Jay leaves a paperweight on the F1 key every weekend….. Thanks Jay, for our nice “markets” .

          ( Wonder what Jay plans to spend his personal $50 million on ?)

        • Cas127 says:


          They never knew fundamentals existed.

      • roddy6667 says:

        Most people gamble with their online brokerage accounts.

  11. Xavier Caveat says:

    Free shipping has to be eating into online profits, and shipping has gone up dramatically in the past few years.

    Every merchant online got sucked into doing it because everybody else is, but for how much longer?

    • 2banana says:

      You do know you pay for the cost of “free shipping” in the elevated price of the online product?

      • taxpayer says:

        One would expect to pay an “elevated
        price” to cover shipping cost, but frequently that does not seem to be the case. I’m surely not the only one here who’s ordered three or four things from W*, or A*, totaling just enough to get “free” shipping, and had them arrive in separate packages. Recently I bought a letter opener, costing a total of <$3 including tax, free shipping, and it arrived in its own inch-thick cardboard box.

        How can the vendors afford to do this? Just a strategy to discourage attempts at competition, raising prices later?

        • Cas127 says:


          I would say the days of this are rapidly fading.

          Yes, 4 or 5 yrs ago, Amazon unit pricing was pretty aggressive.

          But, more recently, it is much more common to see de facto unit floor prices ($4 used book at Amazon is now $5.50) that are engineered to ensure per unit profitability.

          You’ll still see quirks (and with a massive enough fulfillment operation, even $3 per pkg might be breakeven) but by and large, the largest online players have been turning the unit level price screws for a while now.

          That’s why Amazon introduced things like the lobotomy “buy again” button and the roach motel Prime program (“You do want to get use out of your $140 free, right? Not overpaying now would be a waste…”).

          Amazon knows that in the long run, focused niche players are going to beat them on price (unless Amazon wants 2% margins on retail forever).

          The internet is designed for price comparison…so Amazon needs mktg tricks to boost its margins.

    • Javert Chip says:

      B&M retailers also pay shipping bills (how do you think all that stuff shows up at the store?). Of course it’s not as much as shipping to each customer, but it’s not a trivial dollar amount either.

      Also, the less you pay for B&M rent (warehouses are not usually in the high rent portion of town), the more of an off-set it is for free delivery…

      …and we haven’t even discussed the genius of Amazon Prime.

      • Cas127 says:

        Evil genius.

        Wanna come in my van and pet my puppy?

        Just $10 admission.

        Then unlimited, free puppy petting and all the $5 funny tasting candy you can eat!

        I mean, you already spent the $10 bucks…you don’t wanna waste it, right?

        Van visitors have “also visited” my $20 gingerbread house…

        (Basically I’m kidding, Amazon ain’t all that bad, but its price advantages have passed from reality into myth at this pt).

        • Javert Chip says:


          Congratulations; you have just conclusively proven hundreds of millions of Americans (and who knows how many others) shop at Amazon for reasons other than simply price.

  12. David Hall says:

    Amazon is convenient. A one click purchase and record of my recent purchases. Sometimes I shopped different web sites looking for bargains. Some specialty e-tailers are bookmarked.

  13. Beardawg says:

    Just dying to see the near future, namely, the re-purposing of the mega mall locations. Who will win / lose when that all goes down ?

    • josap says:

      Two large indoor malls near me, Phx Metro, are being torn down and replaced with open area malls surrounded by multi-family units/office complex units and some medical buildings. Both malls were designated Redevelopment Areas that qualified for Fed $$, tax benefits.

      There is too much retail space and not enough housing space, so this will help.

    • Wolf Richter says:


      Most mall landlords, such as Simon, will let the mall go back to lenders if its value is significantly below loan value. Most of these commercial mortgages are non-recourse. When the landlord defaults, lenders only get the collateral. Let them take the loss. Then the lenders sell the property for whatever they can get to some developer, who bulldozes the buildings and redevelops the whole thing into housing and maybe a smattering of office and retail.

      The lenders eat the losses (banks, CMBS holders, life insurers, pension funds, etc.).

      The landlord walks away from a non-performing asset.

      The developer, having a much lower cost basis, is hoping to make money building apartment and/or condo buildings on the property.

      • Bart says:


        are we seeing in any material way the balance sheets of life insurance companies or pensions impacted due to this? If not, what is your estimate as to when we do? The whole online thing probably will go through a major evolution in the next few years driven by COVID. Burger King rolling out prototypes soon.

        • Wolf Richter says:

          There are several trillion dollars in CRE debt, backed by US properties. This debt is spread all over the place around the world. Most at risk are smaller regional banks that have concentrated holdings in their region.

          This whole thing started something like three years ago, with more and more malls going back to lenders. And this will take years to wash out. So you don’t have this sudden huge amount that defaults. It’s in bits and pieces.

      • Cas127 says:


        “Most of these commercial mortgages are non-recourse”

        Considering the way of the world…how did this ever become a thing?

        Normally, lenders require the soul of an unborn descendant unto the fourth generation, written in the blood of a sacrificed virgin as guarantee…but Johnny Slickshoes, real estate developer and used car salesman, just has to hand back the keys?

        I’d unprecedently pin it on ZIRP (well known gateway to Satan’s an*s) but I’m pretty sure large scale commercial non-recourse predated it.

        How? Why?

        • Javert Chip says:


          In these days of ZIP, lenders are going so covenant-light that they’re about naked.

  14. WES says:

    The biggest problem that stops me from buying more things online is after filling the shopping cart and inserting the payment info, the transaction is suddenly unable to be completed, requesting you to phone an 800 number the next day during regular business hours. That ends this hassel free shopping experience for me!

    • Javert Chip says:


      I dunno…I’ve shopped Amazon for over 20 years and have never had this happen. I’ve never even read where this is a frequent enough problem for anybody to complain about it.

      Are you paying your bills?

  15. Double Bluff says:

    North gate, near Seattle, was one of the first shopping malls in America. Billionaires are repurposing it as a hockey Mecca to support their new NHL team and arena downtown where the 1962 world’s fair was held. No taxpayer dollars as far as I know.

  16. raxadian says:

    How does shopping online for clothes work on Corona times? Do you have to wash the clothes if they are the wrong size before you return them or what?

    Haven’t bought clothes since before lockdown…

    • josap says:

      Amazon has a try it before you buy it option for some clothing.

    • Wolf Richter says:

      We’re not worried about that. However, we do wash our hands after removing the packaging. This goes for anything we get delivered. Which is a good idea under all circumstances because packages are filthy outside.

    • Cas127 says:

      I work from home.

      What are these “clothes” of which you speak?

      (Tablet cam covered by popular demand).

  17. Njonjo Ndehi says:

    We hardly use our cars and we’re hopelessly addicted to working from home and ordering groceries and meals for home delivery using an app. I just don’t see a recovery of bars, restaurants, airlines, hotels, offices, car manufacturers, malls, fashion industry, etc.

    • josap says:

      Being retired we found we can have just about everything we want or need can be delivered to our door during Covid. I did walk to the pharmacy because I needed to take walks.

      Once we have had our second shots we will be able to use light rail again (with proper precautions). Just don’t need the car. Although we do use it to take drives to buy great fruit pies about 50 miles away. This is a nice trip out of the house in the safety of the car.

      We will use the car again, someday, to go to our favorite restaurants – if they still exist.

  18. Depth Charge says:

    I absolutely despise online clothes shopping (the fit is never right, then comes the hassle of driving to ship a box and waiting for another box or a credit to the account). However, I actually love online grocery shopping then picking it up. Not having to walk the aisles of the grocery store is heaven.

  19. MarketMissing says:

    I wonder if a lot of big companies will end up shrinking ultimately in an ecommerce environment. They are mostly run by folks that don’t care about their workers, customers or quality of the products they sell, at least not ahead of money. This doesn’t seem like a recipe for success. What will hold it all together in the end?

  20. Aussie Andy says:

    A tool store I know of offers online/in store purchase. If bought online all profit goes to head office,but order has to be filled by the store closet to the customer . No benefit received just extra work for the store. Another slow way to cannobolise bricks and mortar retail from within your own organisation.

  21. MCH says:

    OMG… Fry’s is done… going under. What is the world coming to when Fry’s go away. I can remember the last… uh… memory stick… no… RAM… nope…. HD enclosure…. not that either. But I am sure I bought something from Fry’s at some point in my last 20+ years in the Bay Area. So sad, another brick and mortar institution going away.

    Hmmm, do we think they can put a fulfillment center where those Frys are? There is one in Palo Alto, another in SJ, one in Sunnyvale. Prime locations for Amazon sortation centers.

    • TinyTim says:

      I remember shopping at Fry’s when I lived in Oregon in 2002. They had it all. What a shame they are shutting it all down and closing all their stores in 9 States.

      I can’t see them transitioning to online only because they rarely shipped out of the States they operated in. That is a big task and undertaking.

    • Bakes says:

      It’s a shame about Fry’s. I my region we had CompUSA which vanished many years ago. Radio Shack for wiring and components is now gone as well.

      There no longer seems to be any B&M source with a broad range of electronic/computing parts. All my purchases by necessity occur online.

      Does anyone remember Computer fairs in the 80’s and 90’s? Maybe they can make a comeback in this era.

    • Cas127 says:

      Well, if nothing else, Fry’s was a great place to pick up chicks…

      Fry’s and Radio Shack.

  22. GotCollateral says:

    monthly SA in store, vs quarterly NSA online… got a quarterly NSA instore? (obs the trend is down for in store, but comparing the charts as is a PITA)

    • Wolf Richter says:

      Pure ecommerce is reported only quarterly, SA and NSA. “Nonstore retailers” is reported monthly as part of the Advance Retail Report, but that’s not pure ecommerce.

  23. Breadbasket says:

    I shop online all of the time. The selection and price is just so much better. The last time I went to a mall, it was to take my mother to LENSCRAFTERS because she needed glasses right away. Their big selling point was that they had onsite people to make your glasses in an hour or two. Well, we get there and find out they don’t do that anymore. So, what is their selling point now?, Just another overpriced glasses business.

    • roddy6667 says:

      People don’t realize that the eyeglass prescriptions are often filled in China. Before you leave the store after your exam, your lenses are being ground in a factory near an airport in China. The lenses and frames go on the next passenger plane to JFK or LAX, under the plane. Fedex or UPS delivers it to the eyeglass place the next day.
      Dentures are now being made the same way.

    • Bobber says:

      I bought a pair of designer frame glasses at Lenscrafters about five years ago for $700. I bought the same brand of frames at Costco last year for $150. I don’t notice any difference in the lense quality.

    • Young Buck says:

      I wear dailies contacts, but have a backup pair of glasses I got off Zenni with my prescription for like $7. Zenni is ridiculously cheap for glasses.

  24. lisa2020 says:

    Wolf those two links are extremely significant, and of course from Harvard. Regarldless of political affiliations and attitudes, every US citizen needs to read that paper, even if they hate reading, force yourself to read the whole paper.

    That database is the MOST SIGNIFICANT new database being established. This database must be maintained for PUBLIC ACCESS, and not privatized.

    With that written, if anyone wants to really be aware as to the level of all tracking possibilities and probabilities and optimizations, You got it, AND

    Courtesy of the FT, Harvard, and of course Gates and Zuckerbug etal.

    The database can NOT become only a privatized, and privately controlled correlated and aggregated database such as GOOGLE’s.

  25. Crush the Peasants! says:

    Malls serve other purposes besides the display and sales of physical goods and services. Malls have been important sites for pre-mating rituals ( see Weird Science, Mallrats and Clueless). As reproducitve rates continue to fall in Western countries, it remains to be seen if online dating apps can pick up the slack. Also, warnings have been sounded by hairspray manufacturers and industrial cheese-like sauce makers, serving as canary-in-the-coal mine indicators of the collateral damage of mall closures.

    • Harrold says:

      Teens stopped going to the mall when malls started kicking them out.

    • BuySome says:

      Left out the big one-Fast Times…did more promo for Vans, marihooch, and anywhere pizza delivery in one fell swoop. Of course Miller’s Outpost (in that galleria) went bye-bye and we will never see $9.99 501’s ever again.

    • Cas127 says:

      Trisha “Trish the Dish” Jones/Renee Humphrey in Mallrats…Humana humana.

      No falling reproductive rate there.

      How does Meryl Streep keep getting work into her 70s and Renee Humphrey couldn’t buy a career.


  26. gorbachev says:

    I’d read somewhere the U.S has 2-3 times the amount of shops
    per capita of anywhere in the world. Maybe a blowout was
    due anyhow.

  27. Xavier Caveat says:

    All you really need to do is outfit the empty malls with a bunch of gun stores, and you’ll have a line around the block of people desperate to be armed & dangerous. Malls will be cool again, just like they were in 1974.

    • BuySome says:

      Good choice of year…in 1974 most legit gun owners were fairly quiet about their personal protection arms kept just in case needed. But in May, the Los Angeles police went on an insane seige of a house to get at a few SLA members, leaving a pile of ashes. Thus began the insane arming of para-military assault teams by local governments (incorporations more concerned with expansion than anything for public good). To add insult to injury, the harrassment of the public’s right to hold and carry arms increased while real criminals, all the way up from schoolground bullies to serial killers, were being afforded free reign. No wonder so many people became agitated and now openly express their concerns. Leave them alone and they’ll go back to being solemn. Then go after the real problems…criminals and the people who bring you high tech games that train terrorists to fly planes into crowds.

      • Xavier Caveat says:

        No, the coppers really upped their game in the aftermath of the North Hollywood shootout, about 25 years ago. That is when they turned into a paramilitary force, complete with bloused pants to better look the part.

      • RightNYer says:

        Exactly. We will stop loudly screaming “Molon labe” when the left stops trying to take them.

        • Xavier Caveat says:

          How many has the left actually taken?

          Can you document even one case for me?

        • Javert Chip says:

          Does the teenager who’s being prosecuted for shooting people attacking him count? How about the husband & wife in the news pictures defending their property?

          We won’t talk about jurisdictions making it all but impossible to get a CWP.

  28. Rick m says:

    No mall mayhem movie scene like the Blues Brothers. Dawn of the Dead ( “this place must have meant something to them when they were alive “). Maybe abandoned malls would make good soundstages. They require extensive renovation including much slab and HVAC demolition to be repurposed for any sort of residential occupancy.
    Wolf, has your research led you to any conclusions about the prognosis for bricks and mortar in the EU , and for Mexico? Some of Brussels’ client states didn’t get off the mark very quickly on covid relief for retail, and many are still in lockdown. Other than Amlo firing up two coal plants on the Texas border, Mexican business news seems underrepresented. Or I don’t know where to look. I know there’s fedex and DH trucks running all over Europe, what about south of our border?appreciate ya

    I would gladly pay you Tuesday for a WolfCoin today.

  29. Curious says:

    Just came across this on Bloomberg:

    “Mall Values Plunge 60% After Reappraisals Triggered by Bad Debt”

    One expert estimated “only about half of the 1,100 U.S. indoor malls have a good chance of survival.”

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