Despite a strong holiday season, Macy’s CEO Jeff Gennett said he’s wary of consumers’ desire to go out and spend after seeing a drop in their own shopping.
“I’m cautious,” Gennett told Bloomberg’s Caroline Hyde during an interview at NRF 2023: Retail’s Big Show in New York City on Sunday.
Genet explained that gift giving was “pretty strong in November and December.”
“We saw that on Black Friday and Cyber Monday,” he said. “We saw it the week before Christmas, the week after Christmas.”
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However, his caution is attributed to the other five weeks of the nine-week holiday period, otherwise known as a lull, when Macy’s sees more of its own buying activity.
“These calms were more pronounced this year than in previous years,” he said. “So that’s where the consumer is.”
He described that period as the first few weeks of November and the second and third weeks of December.
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When looking at overall credit card data, Gennette noticed that customers were building balances on Macy’s store and co-branded cards. He also notices an increase in violations.
This shows that “the consumer is under pressure,” he said.
Given this auto-purchase data combined with credit card data, “and then just looking at the macro effects that are happening in the economy … it’s worth saying be cautious, but be ready to pounce when the opportunities and signals present themselves,” Gennett said. has added.
Although inflation is slowing, it is still painfully high. Annual inflation fell to 6.5% in December, the Labor Department announced last week. It marked the slowest rate of inflation since October 2021 and the slowest monthly rate since April 2020, but it remains about three times higher than the pre-pandemic average.
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Still, Gennett said, “the luxury consumer is in very good shape.” Bluemercury and Bloomingdale’sboth company-owned stores, are “really strong,” and Gennette envisions the success continuing.
“There are a few cracks in a few categories and a few brands, but nothing to worry about,” he added.
FOX Business’ Megan Henney contributed to this report