WEBVTT - Dana Telsey Talks 2025 Retail Recap

0:00:02.520 --> 0:00:07.040
<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

0:00:07.760 --> 0:00:10.240
<v Speaker 2>So let's stick with the consumer as focus shifts toward

0:00:10.280 --> 0:00:13.200
<v Speaker 2>the new year. Data telseia with Telsey Advisory Group writing

0:00:13.400 --> 0:00:17.080
<v Speaker 2>heading into twenty twenty six, we expect events, hire, reef,

0:00:17.120 --> 0:00:20.639
<v Speaker 2>tax refunds, and more accommodative interest rates to drive a

0:00:20.680 --> 0:00:25.640
<v Speaker 2>continued recovery and discretionary spending, especially among younger consumers. Data

0:00:25.960 --> 0:00:27.840
<v Speaker 2>joins us now in person, thank you so.

0:00:27.840 --> 0:00:29.440
<v Speaker 1>Much for being here, Thank you for having me.

0:00:29.480 --> 0:00:32.280
<v Speaker 2>It's wonderful to get your insights as we all look

0:00:32.320 --> 0:00:34.600
<v Speaker 2>at our gifts from the holidays, decide which ones we

0:00:34.640 --> 0:00:37.600
<v Speaker 2>need to return. What's to read on how well this

0:00:37.680 --> 0:00:42.040
<v Speaker 2>season really did perform for retailers broadly across the sphere.

0:00:42.240 --> 0:00:45.120
<v Speaker 1>I think holiday season was solid. I think those increases

0:00:45.200 --> 0:00:48.360
<v Speaker 1>three point nine four point two percent very much in

0:00:48.400 --> 0:00:52.400
<v Speaker 1>line with expectations. These ten days after Christmas are very

0:00:52.479 --> 0:00:56.639
<v Speaker 1>important too, whether for returns, for gift card redemptions, all

0:00:56.760 --> 0:00:58.760
<v Speaker 1>very important to see what it looks like. But the

0:00:58.800 --> 0:01:01.560
<v Speaker 1>product newness drove to demand, and with the case shaped

0:01:01.600 --> 0:01:04.319
<v Speaker 1>economy that we have, you're definitely seeing at the higher

0:01:04.400 --> 0:01:07.520
<v Speaker 1>end and the lower end looking for value. And that's

0:01:07.520 --> 0:01:10.200
<v Speaker 1>where you saw some of the traffic, whether it's the Walmart's,

0:01:10.200 --> 0:01:13.600
<v Speaker 1>whether it's the Tjx's. They were there the last ten

0:01:13.680 --> 0:01:17.120
<v Speaker 1>days before Christmas, as always, is where you got the

0:01:17.120 --> 0:01:19.160
<v Speaker 1>real bump up in terms of top line.

0:01:19.360 --> 0:01:24.520
<v Speaker 3>I'm fascinated by the bifurcation between Walmart and Target because

0:01:24.560 --> 0:01:28.120
<v Speaker 3>I had seen them previously in kind of the same box.

0:01:28.440 --> 0:01:31.600
<v Speaker 3>But Walmart has done so well this year and Target

0:01:31.640 --> 0:01:33.360
<v Speaker 3>has disappointed.

0:01:33.680 --> 0:01:33.920
<v Speaker 2>Why.

0:01:34.360 --> 0:01:37.160
<v Speaker 1>I think overall what you've seen from Walmart and Target

0:01:37.280 --> 0:01:40.520
<v Speaker 1>store standards have fallen. You haven't seen the same innovation

0:01:40.600 --> 0:01:44.360
<v Speaker 1>and product newness. You haven't seen the same forward momentum

0:01:44.360 --> 0:01:48.920
<v Speaker 1>of movement, particularly with technology, where Walmart is anticipating what

0:01:49.000 --> 0:01:52.120
<v Speaker 1>the customer needs and they really have modernized their whole

0:01:52.160 --> 0:01:55.720
<v Speaker 1>store format. The Walmart of today is not the Walmart

0:01:55.720 --> 0:01:57.240
<v Speaker 1>of five or even ten years ago.

0:01:57.640 --> 0:02:02.720
<v Speaker 3>If we see a CA shaped toomy, do we get

0:02:02.920 --> 0:02:08.240
<v Speaker 3>Dollar Tree? You know these family dollar kind of discount

0:02:08.280 --> 0:02:12.720
<v Speaker 3>stores doing well, because if I look at the stock performance,

0:02:13.160 --> 0:02:16.000
<v Speaker 3>I don't see Dollar Tree taking off.

0:02:16.360 --> 0:02:19.400
<v Speaker 1>I think overall you will see those dollar stores perform.

0:02:19.720 --> 0:02:22.320
<v Speaker 1>Keep in mind that in twenty twenty five, the focus

0:02:22.320 --> 0:02:26.520
<v Speaker 1>on tariffs who imports goods from China was impactful certainly

0:02:26.560 --> 0:02:29.519
<v Speaker 1>to the dollar stores, and now lapping tariffs should be

0:02:29.560 --> 0:02:31.959
<v Speaker 1>a benefit to them over time. Who you saw is

0:02:32.040 --> 0:02:35.040
<v Speaker 1>share gainers. It was all the off pricers, I mean,

0:02:35.080 --> 0:02:38.160
<v Speaker 1>whether it was Burlington Ross Stores or TJ Max. With

0:02:38.320 --> 0:02:42.160
<v Speaker 1>the diversification of the assortment that they had, they captured customers.

0:02:42.240 --> 0:02:44.000
<v Speaker 2>What's fascinating to me is you're talking about how this

0:02:44.120 --> 0:02:46.440
<v Speaker 2>was a solid holiday season, and yet we're talking about

0:02:46.440 --> 0:02:48.920
<v Speaker 2>a bankruptcy potentially at the end of this month of

0:02:48.919 --> 0:02:51.880
<v Speaker 2>one of the biggest retailers, of saxopith Avenue, which faces

0:02:52.000 --> 0:02:53.959
<v Speaker 2>more than one hundred billion dollars of a debt payment.

0:02:54.000 --> 0:02:56.320
<v Speaker 2>A lot of people are wondering whether that will actually happen.

0:02:56.680 --> 0:02:58.880
<v Speaker 2>Can you square this story the idea that we're talking

0:02:58.919 --> 0:03:02.080
<v Speaker 2>about robust sales, a steady consumer I'll be a picky

0:03:02.160 --> 0:03:04.400
<v Speaker 2>or choosier or whatever you want to say, at the

0:03:04.440 --> 0:03:06.280
<v Speaker 2>same time that we could see a bankruptcy of one

0:03:06.320 --> 0:03:07.680
<v Speaker 2>of the biggest retailers out there.

0:03:07.800 --> 0:03:09.760
<v Speaker 1>Well, when you think of who's gaining share from that,

0:03:10.120 --> 0:03:12.800
<v Speaker 1>you look at the new brands that both Bloomingdale's and

0:03:12.919 --> 0:03:16.160
<v Speaker 1>Nordstrom are putting on their shelves, stocking in their stores,

0:03:16.440 --> 0:03:19.600
<v Speaker 1>they're gaining share. Just across the street on fifty ninth Street,

0:03:19.600 --> 0:03:23.440
<v Speaker 1>Bloomingdale's just opened a new extension to their fourth floor

0:03:23.639 --> 0:03:28.280
<v Speaker 1>with newer brands, whether it's Victoria Beckham, whether it's Valentino Totem.

0:03:28.560 --> 0:03:31.720
<v Speaker 1>They have a whole new assortment of goods out there that, frankly,

0:03:31.840 --> 0:03:35.080
<v Speaker 1>perhaps if not for this change, you would not see

0:03:35.200 --> 0:03:38.240
<v Speaker 1>those brands in Bloomingdale's, and you're seeing it in Bloomingdale's

0:03:38.240 --> 0:03:39.080
<v Speaker 1>and a Nordstrom.

0:03:39.160 --> 0:03:40.840
<v Speaker 2>How much is this a pattern that you expect to

0:03:40.840 --> 0:03:43.840
<v Speaker 2>be repeated, that we're going to see wholesale bankruptcies of

0:03:43.920 --> 0:03:46.280
<v Speaker 2>some retailers that are not keeping up with a new product,

0:03:46.680 --> 0:03:48.960
<v Speaker 2>while others I'm thinking of Walmart or I'm thinking of

0:03:48.960 --> 0:03:51.960
<v Speaker 2>Bloomingdale's continue to gain share. Sort of the big get

0:03:52.000 --> 0:03:55.520
<v Speaker 2>bigger can invest in technology, and you see wholesale bankruptcies.

0:03:55.520 --> 0:03:56.000
<v Speaker 2>On the other.

0:03:55.880 --> 0:03:59.040
<v Speaker 1>Side, financial leverage is very important in order to keep

0:03:59.040 --> 0:04:02.480
<v Speaker 1>the operations of a retailer running smoothly. You get into

0:04:02.520 --> 0:04:06.840
<v Speaker 1>trouble with financial leverage, that's an issue. It always takes

0:04:06.840 --> 0:04:10.000
<v Speaker 1>a lot to kill a retailer. They don't just die overnight.

0:04:10.280 --> 0:04:13.520
<v Speaker 1>Take a look, for example at Blockbuster from many years ago,

0:04:14.000 --> 0:04:16.000
<v Speaker 1>and certainly we'll have to see what happens with that

0:04:16.120 --> 0:04:20.720
<v Speaker 1>debt payment of Sacks that's coming to very shortly. But certainly,

0:04:20.960 --> 0:04:24.120
<v Speaker 1>when one is weak, others can gain strength, and that's

0:04:24.120 --> 0:04:26.280
<v Speaker 1>what you're seeing in Bloomingdale's. In Nordstrom, we.

0:04:26.240 --> 0:04:30.000
<v Speaker 3>Talk about Bloomingdale's. Obviously it's a great store, it's an

0:04:30.160 --> 0:04:35.000
<v Speaker 3>iconic department store across the street here, but it's owned

0:04:35.040 --> 0:04:39.559
<v Speaker 3>by Macy's and that stock is down thirty percent this year.

0:04:40.360 --> 0:04:44.680
<v Speaker 3>What's Macy's doing wrong that it's Bloomingdale's is doing right?

0:04:45.040 --> 0:04:47.640
<v Speaker 1>I think overall the bold new chapter strategy that the

0:04:47.680 --> 0:04:50.680
<v Speaker 1>CEO of Macy's, Tony Spring, is put in place, they're

0:04:50.680 --> 0:04:54.119
<v Speaker 1>making advancements and you're seeing some change in Macy's. Also.

0:04:54.600 --> 0:04:56.840
<v Speaker 1>You look this year at Macy's and what they've done

0:04:56.880 --> 0:04:59.799
<v Speaker 1>where it's backstage with the off price, in their assortment,

0:05:00.120 --> 0:05:02.800
<v Speaker 1>whether it's what they're doing with luxury, whether it's what

0:05:02.880 --> 0:05:06.320
<v Speaker 1>they're doing with their own brands, and frankly, the store experience,

0:05:06.640 --> 0:05:10.159
<v Speaker 1>the investments that they've made into the top one hundred

0:05:10.160 --> 0:05:13.479
<v Speaker 1>and twenty five hundred and fifty stores is outperforming the

0:05:13.520 --> 0:05:15.800
<v Speaker 1>core and I think you're going to continue to see

0:05:15.839 --> 0:05:19.120
<v Speaker 1>the assessment of the footprint of Macy's continue to be

0:05:19.320 --> 0:05:22.279
<v Speaker 1>architected towards their best performing stores over time.

0:05:22.320 --> 0:05:24.119
<v Speaker 3>So you like Macy's. I mean, is this a buying

0:05:24.160 --> 0:05:25.280
<v Speaker 3>opportunity than this dip.

0:05:25.400 --> 0:05:27.760
<v Speaker 1>I think Macy's is an opportunity. I think when you

0:05:27.760 --> 0:05:30.560
<v Speaker 1>think about next year and you frankly think about the

0:05:30.680 --> 0:05:34.440
<v Speaker 1>enhancements that they've made to assortment, both in Macy's and Bloomingdale's.

0:05:34.520 --> 0:05:37.040
<v Speaker 1>It's not expensive for where it is, and you look

0:05:37.080 --> 0:05:39.880
<v Speaker 1>at the landscape of department stores that are public companies,

0:05:40.160 --> 0:05:44.000
<v Speaker 1>it's Macy's, Coals, and Dillard's. Macy's has an opportunity on

0:05:44.120 --> 0:05:45.320
<v Speaker 1>valuation to move higher.

0:05:45.520 --> 0:05:46.960
<v Speaker 2>Dana, do you think that early next year we're going

0:05:47.000 --> 0:05:49.200
<v Speaker 2>to see pretty big price increases across the board for

0:05:49.240 --> 0:05:49.880
<v Speaker 2>retail goods.

0:05:49.920 --> 0:05:52.680
<v Speaker 1>You're going to see more price increases coming, But keep

0:05:52.680 --> 0:05:55.359
<v Speaker 1>in mind this innovation and newness that we have. You

0:05:55.360 --> 0:05:57.880
<v Speaker 1>don't have a comparative, so we'll have to see what

0:05:57.920 --> 0:06:01.839
<v Speaker 1>those prices look like. Consumers are cautious and discerning, but

0:06:01.920 --> 0:06:03.040
<v Speaker 1>they'll buy what they don't have.

0:06:03.400 --> 0:06:06.039
<v Speaker 2>Dana Telsea, wonderful, Thank you, thank you so much for

0:06:06.080 --> 0:06:09.080
<v Speaker 2>being having us today. Happy New Year, Dana Telsea Telsey

0:06:09.200 --> 0:06:10.080
<v Speaker 2>Advisory Group,