After a harsh winter and a slump in growth in the first quarter, there are signs that the American consumer might be making a comeback. But Macy’s CEO Terry Lundgren says it’s “not adding up.”
“You saw GDP being revised downward, and that’s not surprising to us because the first quarter for us, as it was for many retailers, was softer than we all had anticipated,” Lundgren told FOX Business Network’s Maria Bartiromo.
Lundgren said the negative impact of a strong dollar and challenges with a port slowdown “are past us,” and he believes the consumer will ramp-up retail spending in the fall season.
“Certainly for now, they are buying houses, and we are benefitting from the furniture business and the big ticket pieces of that. They are buying technology, and health care prices are going up…They are spending their money. But overall, it’s pretty flat at this point ... It doesn’t add up to real growth in the overall economy,” he said.
According to Lundgren, an increase in savings will get consumers to start spending again and drive the economy.
“The consumer should be feeling pretty confident [they have] more savings today than they had this time a year ago and the year before that … there should be an opportunity for the consumers to spend and when they do, that’s what will create momentum that this country needs in terms of GDP growth,” he said.
Lundgren said the company is taking an “offensive” approach to luring the consumer back into stores. They recently opened an off-price business called Backstage and purchased beauty company Bluemercury.
During the first quarter, the company saw strength and growth in its Internet business, which according to Lundgren is the 7th largest Internet Company behind Netflix (NASDAQ:NFLX). He believes that it has created a new shopping trend.
"The fastest segment of growth is, you buy it online and then you pick it up in the store. So you get the immediate satisfaction of having the product. You’ve actually sat in the chair or tried on the blouse, or you’ve had the makeup applied. So you get that extra experience inside the store…It’s really an Omni channel experience and I love that transaction because the more the customer touches us online, in-store, the more loyal they become,” he said.