Macy's CEO says there's one thing everyone is getting wrong about the retail industry

Macy's

(Reuters)
Shoppers at Macy's Herald Square in New York City on Thanksgiving.

Macy's CEO Terry Lundgren says the death of the department store has been "grossly exaggerated."

"If you saw the traffic when we opened the doors at 6 p.m., flowing into stores like Macy's Herald Square, you'd say people definitely want to shop on that night and in a store like Macy's," Lundgren told CNBC's "On the Money" about Macy's store traffic on Thanksgiving. "So we feel great about what's transpired here."

Sales have been declining at department stores for the last decade.

More recently, Macy's reported this month that its same-store sales declined for the third straight quarter, and Nordstrom also reported that same-store sales slowed drastically in the most recent quarter. JC Penney did better than expected last quarter, but its shares still dropped.

Many retail executives, including Lundgren, have blamed unseasonably warm weather for the poor results.

But analysts say there's a larger, potentially more permanent trend affecting department stores: Americans are now choosing to spend more money on big-ticket items and experiences than on clothes and shoes.

Lundgren argues however that consumers are just shifting how they make their purchases.

"Consumers are starting the journey with their phone, doing their research, then they come into the store to try on the clothes, or touch that handbag, or have makeup applied, all those things that are more tactile," Lundgren told CNBC.

Then shoppers might buy "might buy it in the store or they'll buy it at Macys.com or Blooomingdales.com. That's what's changed."

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