What will department store sales reveal in 2024?
After the post-pandemic euphoria, the world’s department stores are experiencing a slowdown. But behind this overall downturn, the World Department Store Observatory reveals highly contrasting regional dynamics.
An overall decline for department stores of -1.6% over 2023-2024
According to the latest report from theObservatoire Mondial des Grands Magasins (created in 2021 by IADS), worldwide department store sales fell by -1.6% in the 2023/2024 financial year. After a strong recovery in 2021/2022, the sector as a whole seems to be falling back into a phase of normalization, against a backdrop of structural change: mergers, privatizations, changes in shareholder ownership and difficulties in segmenting figures by business unit.
While this decline may seem moderate, it reflects a certain tension in a sector historically linked to the economic stability of major metropolises.
United States: renewed stability despite uncertainty
Against all expectations, sales by American department stores such as Macy’ s and El Palacio de Hierro in Mexico stabilized. In fact, their weighting in parent company results rose slightly. This can be explained by a rise in sales in these chains, but also by a fall in the owner groups’ overall revenues, which mechanically increases their relative share.
However, the future remains uncertain: inflationary pressure, US elections, impending tariffs and uncertainty surrounding TikTok could once again destabilize a fragile market. At the same time, luxury consumption is expected to grow by 6% in the United States by 2025.
Asia in transition: from retreat to hope
In Asia-Pacific, the situation is more complex. Japan, South Korea and Hong Kong are all recording significant declines. But India and Vietnam are emerging as new growth drivers. The announced opening of Galeries Lafayette stores in Mumbai (2025) and Delhi (2026) underlines this geographical shift. Vietnam, still a low-profile market, has been identified as a high-potential player for years to come.
Europe remains cautious but solid
In Europe, department stores have returned to a higher level of contribution than in the pre-Covid era. But with average growth of less than 1%, the sector remains fragile, particularly under the impact of European sustainability regulations.
Heading for omnichannel department stores in 2025?
To bounce back, department stores will need to focus on omnichannel, enhanced customer experience and rapid adaptation to new consumer expectations.
Also read: Chanel x Grey Mer: a silent domination of the shoe?