Department Stores Industry Profile

The US department store industry includes about 20 companies that operate about 3,500 stores with a combined annual revenue of about $60 billion. Major companies include Sears, JCPenney, Macy's (which owns Bloomingdale's), and Dillard's. The industry is highly concentrated: the top eight companies generate about 95 percent of industry revenue.

Worldwide, the department store industry has revenue of about $400 billion, according to Global Industry Analysts. Major companies based outside the US include Marks & Spencer (UK), El Corte Ingles (Spain), Galeries Lafayette (France), Tokyu Department (Japan), Galeria Kaufhof (Germany), and Debenhams (UK).

Department stores differ from discount department stores in that most department stores have checkout registers within individual merchandise departments instead of a central checkout area. A separate Discount Department Stores profile covers that industry.

COMPETITIVE LANDSCAPE

Consumer spending and fashion trends drive demand. The profitability of individual companies depends on effective merchandising and marketing. Large companies have advantages in purchasing, distribution, and marketing. Small companies can compete effectively by offering unique merchandise, providing superior customer service, or delivering a distinctive store experience. The industry is labor-intensive: average annual revenue per worker is about $110,000.

Department stores compete with discount department stores and mass merchandisers, specialty stores, off-price and outlet stores, Internet and mail-order retailers, and home shopping networks. As a result of increased competition, department store sales declined between 2000 and 2010, both in dollar terms and as ...