Retail Channels
20 January
Nordstrom holiday sales below pre-pandemic. It's not just the economy
Nordstrom Rack sales were down a sizable 7.6% from 2021.

Nordstrom | Nordstrom Mall Entrance, 1/2015 by Mile Mozart o… | Flickr (www.flickr.com)
Nordstrom Rack sales were down a sizable 7.6% from 2021.
Nordstrom | Nordstrom Mall Entrance, 1/2015 by Mile Mozart o… | Flickr (www.flickr.com)
Nordstrom posted holiday results showing sales declines over the busiest retail season.
For the nine-week period ending Jan. 1, Nordstrom shared the following data:
CEO Erik Nordstrom said the sales totals were even below 2019 norms.
"The holiday season was highly promotional, and sales were softer than pre-pandemic levels,” said Nordstrom, in a statement. “While we continue to see greater resilience in our higher income cohorts, it is clear that consumers are being more selective with their spending given the broader macro environment.”
On the supply side, Nordstrom also said it took more markdowns than planned toward the goal of ending the year in a clean inventory position. Year-end inventory is expected to finish at a double-digit percentage below 2021, and in line with 2019 levels, Nordstrom said.
"Having a healthier inventory level and mix positions us well to react quickly to changing consumer demand," said Pete Nordstrom, president and chief brand officer of Nordstrom. "Given the continued uncertain environment, we remain focused on executing with flexibility and agility, including conservative buy plans and faster inventory turns.”
Here are a few takeaways for anyone in retail to consider:
Following in the footsteps of Macy’s, Nordstrom is the latest department store retailer to post a more lackluster holiday period. The more difficult consumer picture, colored by converging inflation and interest rates, made the holidays particularly discount-heavy, which in turn hurt both topline sales and profits. Across retail, sales grew 5.3% for the holidays, which was below the National Retail Federation forecast.
The economic pullback is far-reaching enough that every retailer can likely feel justified in pointing to it at this time, especially as they continue to work out of inventory issues as Nordstrom did. In either case, discounts are the way to get through it, and those hurt margins.
But every retailer did not report uniform holiday declines. American Eagle, Abercrombie and URBN all reported sales growth during the holidays.
Some of Nordstrom’s issues appear to be internal. GlobalData Managing Director Neil Saunders noted that the Nordstrom decline of 1.7% was a “modest reduction,” but said it “was delivered at a time when Nordstrom should have come into its own as consumers took a keen interest in new fashions for the holidays. That it didn’t is a function of its own merchandising and inventory missteps.”
Adding to the problems, Nordstrom Rack posted a bigger decline, and “does not seem to have been able to get back on the front foot,” since the pandemic as a result of assortment and inventory issues at stores.
So what can be done? Saunders suggests adding categories beyond fashion.
“While department stores did put in some effort to create areas which showcased non-apparel gifts for the holidays, this was a rather half-hearted effort,” Saunders said. “In short, Nordstrom needs to think carefully about how it can maximize spending from its shoppers and make itself a must-visit destination.”
Nordstrom is also starting the year looking to fill a key digital leadership role.
Jason Gowans was named SVP and chief digital officer at Levi Strauss & Co., where he will focus on bringing together engineering, data, AI and digital product management in both ecommerce and go-to-market.
Gowans most recently served as SVP of digital commerce at Nordstrom, where he led ecommerce for both Nordstrom and Nordstrom Rack. It caps a decade-long run at the company where he also led data science and analytics across all functions.
While there's void to fill at the company, it's a reminder: Ecommerce remains a growing area for Nordstrom, with top talent. In fact, it might be a good place to test expansion into the new categories that Saunders suggested.
Still, plans to buy big-ticket items ticked up.
“Deterioration.” “Gloomy.”
Those were a couple of the words used to describe consumer confidence in May. The Conference Board reported that the index fell to a six-month low amid debt ceiling anxiety and increasing concerns about employment.
“Consumer confidence declined in May as consumers’ view of current conditions became somewhat less upbeat while their expectations remained gloomy,” said Ataman Ozyildirim, senior director of economics at the Conference Board, in a statement. “...While consumer confidence has fallen across all age and income categories over the past three months, May’s decline reflects a particularly notable worsening in the outlook among consumers over 55 years of age.”
The dip among those over 55 came as Congress negotiated a deal over increasing the debt ceiling that included talk of cuts to programs such as social security and Medicare. While officials reached an agreement over Memorial Day weekend, the Conference Board’s survey was fielded prior to that date.
The job picture appears to be more anecdotally cloudy, as the number of consumers reporting jobs as “plentiful” fell to four percentage points to 43.5%. The job market has been consistently robust for nearly three years, as unemployment remains near historic lows. In April, the economy added 253,000 jobs, which remained a positive sign despite being below the gains of prior months. The confidence reading comes ahead of fresh data from the U.S. Bureau of Labor Statistics on Friday.
Despite the declines, there were signs that consumers are not completely pulling back on big-ticket items. Plans to buy big-ticket items such as cars and appliances ticked up on a monthly basis. It’s worth watching whether this extends to providing resilience in other discretionary categories, which have seen a pullback in early 2023.
Nevertheless, the index offered another sign that the consumer mood is getting more pessimistic. It was the fourth time in five months that confidence fell. On Friday, the University of Michigan offered another with a consumer sentiment report that showed a 7% dip.
Brands and retailers must work to reach consumers that are increasingly in less of a buying mood than the month before.