According to the Bureau of Economic Analysis, GDP declined 0.9% in Q2, following a 1.6% fall in Q1. That’s widely considered an indicator of a recession. This news comes after a week of disappointing Q2 results, which, in turn, spurred a wave of workforce cuts.
While Nordstrom hasn’t seen its customers cutting back, it could be only a matter of time before the recession comes for the department store.
Let’s take a look at the retailer as it teeters on the fine line between Q1 success and its looming Q2 results.
47%: The percentage of US adults spending less on apparel due to rising prices, per a May CivicScience survey. However, Nordstrom isn’t seeing customers trade down for lower prices; it’s having trouble moving discounted clearance merchandise as consumers focus on new products, said CEO Erik Nordstrom. FWIW, luxury retailer LVMH Moët Hennessy Louis Vuitton posted strong earnings this week, citing high demand for swank goods.
70%: The percentage of Nordstrom customers interested in styling services. The retailer said shoppers who work with a stylist spend seven times more.
$680 million: Nordstrom’s 2021 click-and-collect sales. Customers that use this service spend 3.5 times more than consumers who don’t. We predict total US click-and-collect sales will increase 19.4% this year, up nearly 10 percentage points from last year’s 9.7% growth.
3.7%: The percentage visits to indoor malls fell, month over month, in June, per Placer.ai. Visits to open-air shopping centers also fell 2.4%. Nordstrom is among a handful of department stores opening smaller, local locations to capitalize on consumers staying closer to home.
$3.47 billion: Nordstrom’s revenues for Q1 2022, up 18.7% year over year (YoY). Nordstrom banner net sales rose 23.5%, and net sales for Nordstrom Rack increased 10.3% YoY. The top categories were men's and women's apparel, shoes, and designer brands.
Why we care: Nordstrom had a strong first half. Can it ride that success through the back half of the year or will inflation and a recession take its toll?
This was originally featured in in the Retail By the Numbers newsletter. For more retail insights, statistics, and trends, subscribe here.
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