Because Macy’s is closing 150 stores.
Today’s post is by Ron Southard, CEO at SafeSourcing Inc.
Miricle on 34th Street was one of my favorite childhood movies, I mean who does not want to believe in Santa Claus. We probably need more of that magic today than we have in many years. If you don’t remember, a divorced New York mother hires a nice old man named Kris Kringle to play Santa Claus at Macy’s, and we get to watch a lawyer prove in court that he really is Santa Claus.
In a recent article regarding the closures, it mentioned that this is part of a larger cost-cutting and investment realignment with a focus on more profitable stores and expanding e-commerce.
Now for Magic!
Well as you know, I am all for cost-cutting and I don’t know what Macy’s is doing about it, but I know it can be done better.
Personally, I have a distaste for bottom line improvement via headcount reduction, when I KNOW that more money can come out of cost of goods, expenses, and capital projects. While these may be areas of focus, most companies do a poor job of it even with advanced tools and big consulting firms helping them and charging out their nose for it.
And now we hear another American Icon is declaring bankruptcy and selling to the competition True Value announces their discontinuation. And While I’m at it, Walgreens another American household name has announced closing 1200 locations.
It’s true that e-commerce has made it easier for people to shop from home and that makes it more difficult for companies to offer in-store marketing plans that encourage upselling, but we also know that many are not shopping because they cannot afford it. Prices are just too high. I recently read Walmart’s CEO said they are doing everything in their power to keep consumer prices down. Congratulations!
More companies need to do the same by focusing on compressing their prices on all for resale products, all services, and all non-P&L related projects. Who knows, you might still be able to improve margins and earnings.
If you don’t know how, give me a jingle (as in bells). You’ve got to love holiday magic.
For those of you that are looking for an opportunity to claw back against the recent price increases on everything, it is right in front of you. For those that listen to your vendors, expect the price increases to continue.
For more information, please contact SafeSourcing.
