For more than a year, the biggest names at the shopping mall have cast a hopeful eye on the declining jobless rate and low gas prices, betting that it was only a matter of time before consumers snapped out of a cycle of tepid spending that has left many retailers grappling with weak sales and declining store traffic, according to a Washington Post commentary today. But, with the likes of Gap, Macy’s and Kohl’s reporting this week that they rang up surprisingly dismal sales this spring, retailers — especially apparel chains and department stores — are facing a troubling reckoning. The economy is bouncing back, and customers just aren’t hitting stores or filling up digital carts like the shopping giants thought they would. “There seems to be some more macro issue, given both performance of ourselves and our competition,” said Wes McDonald, chief financial officer at Kohl’s, on a conference call with investors Thursday. “There seems to be some change in consumer behavior.” The uncertainty is lending fresh urgency to the challenges facing old-school stores, whether it is adjusting to the reality of online commerce or watching their customer base shift from big-spending baby boomers to the more cautious millennials. The industry is suddenly awash in talk about being “overstored,” too many physical outlets chasing too few shoppers. “My personal view of the retail real estate industry in the U.S. is that it is over-retailed,” Sandeep Mathrani, chief executive of General Growth Properties, told analysts this month. “The primary reason retail properties have closed and will close is obsolescence.”
