Macy's CEO is 'cautious' about consumer spending after seeing dip in self purchases

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Despite the strong holiday season, Macy's CEO Jeff Gennette says he is cautious about the consumer's desire to go out and spend after seeing a drop-off in self purchases.

"I am cautious," Gennette told Bloomberg's Caroline Hyde during an interview during NRF 2023: Retail’s Big Show in New York City on Sunday. 

Gennette explained that the gift giving periods "were quite strong during the November and December timeframe."

Jeff Gennette, chief executive officer of Macy’s Inc., outside the company’s flagship store in New York, U.S., on Wednesday, May 12, 2021.  ( Ismail Ferdous/Bloomberg via Getty Images / Getty Images)

"We saw that in Black Friday and Cyber Monday," he said. "We saw that 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 the lull, when Macy's sees more self purchase activity. 

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MMACY’S INC.23.01+0.26+1.14%

"Those lulls were more pronounced this year than in years past," he said. "So that is where the consumer is." 

He described that period as the first few weeks of November and the second and third week of December. 

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Jeff Gennette, chief executive officer of Macy’s Inc., speaks during the Bloomberg Equality Summit in New York, U.S., on Tuesday, March 22, 2022.  ( Jeenah Moon/Bloomberg via Getty Images / Getty Images)

When you look at overall credit card data, Gennette has noticed that customers are building balances on Macy's store and co-branded cards. He is also noticing a rise in delinquencies. 

This shows that the "consumer is under pressure," he said.  

Given this self-purchasing data combined with credit card data "and then just looking at the macro influences of what's going on in the economy…it's a point to say be cautious, but be ready to pounce when opportunities and signals present themselves," Gennette added. 

Although inflation is slowing, it is still painfully high. Inflation declined to 6.5% in December on an annual basis, the Labor Department announced last week. It marked the slowest annual inflation rate 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, Gennette said the "luxury consumer is in very good shape." Bluemercury and Bloomingdale's, both company-owned stores, are "really solid" and Gennette projects that success to continue. 

"There's a couple of cracks in a couple of categories and a couple of brands, but nothing concerning," he added.  

FOX Business' Megan Henney contributed to this report

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