Shoppers Are Abandoning Kohl's and Gap, Data Shows: Here's Why
The two retailers both reported lower sales last quarter.
Malls are much less central to retail culture than they once were. The decline of these once-loved malls has pushed former giants like Sears And JCPenney in massive closures. Meanwhile, other mall stalwarts are reporting worrying numbers. Both Kohl's and Gap just reported a substantial drop in sales, which could mean shoppers are taking their business elsewhere. Read on to find out what's behind their recent declines.
RELATED: Shoppers Are Abandoning Macy's, Data Shows: Here's Why . ae0fcc31ae342fd3a1346ebb1f342fcb
Kohl's has just announced a drop in sales.
In an August 23 Press release , Kohl's Corporation released its latest financial results for fiscal year 2023. According to the report, the retailer struggled in the second quarter, which ended July 29. For the quarter, Kohl's experienced a 4.8 percent decline in net sales from the same period a year earlier, and a 5 percent decline in comparable sales.
These low sales in the second quarter, Kohl's profits were cut nearly 60 percent, the Associated Press reported.
Better life contacted Kohl's about their recent sales decline, and we'll update this story with their response. But it's not the only retailer grappling with sales numbers.
RELATED: Buyers Are Abandoning Their Target, Data Shows: Here's Why .
Gap sales are also down.
Gap Inc. also just released financial results for its second quarter of fiscal 2023. In an August 24 Press release , the company revealed that its net sales fell 8 percent from a year earlier, while comparable sales were down 6 percent. The company said in-store sales were down 7% from a year ago and online sales fell 11%.
These results include the entire retail portfolio of Gap Inc.: Old Navy, Gap, Banana Republic and Athleta. To varying degrees, all of these major brands have seen their sales decline.
When Better life After contacting Gap for more information, a spokesperson referred us to the call on the results.
RELATED: Shoppers Are Turning Away From Lowe's and Costco, Data Shows: Here's Why .
Kohl's says shoppers are turning away from its online marketplace.
During an August 23 call for results Analysts said Kohl's blamed most of its decline on recent digital changes. As CEO of Kohl Tom Kingsbury explained, the company has worked over the past two quarters to reduce its general promotions and eliminate online-only offers to simplify its pricing and target discounts.
"Most of our shrinkage has come from digital, and it's kind of been self-inflicted because we've reduced the number of online-only consumer offerings," Kingsbury said on the call.
But Kohl's doesn't expect shoppers to abandon its online platform for long.
"As far as digital goes, we think it will improve as we go this year," Kingsbury said. "And then obviously we're looking at a return to growth in 2024, once we've celebrated all of these online-only promotions that we had."
RELATED: For more up-to-date information, sign up for our daily newsletter .
Gap Inc. faces consumer pressure at Old Navy stores.
Gap Inc. Chief Financial Officer Katrina O'Connell said its sales across its four brands were also impacted by a “choppy consumer backdrop” on August 24. call for results with analysts. But according to the executive, shoppers seem to be turning away from one retailer in particular the most: Old Navy.
O'Connell told analysts the retailer has seen "increased softness" with its activewear, as well as "slower demand" from lower-income customers.
“Consumer pressure is strongest at Old Navy,” she said. “We all remain cautious as to whether it is the low-income consumer who is starting to experience real pressure on wages due to inflation or whether it is the new dynamics of student loans. We will see how that plays out. will pass for Old Navy."
