Tis the Season for Spending: Macy's Gears Up
Macy's CEO Terry Lundgren on why the retail giant is still succeeding, despite a challenging economy
- Duration 9:53
- Date Nov 25, 2011
Macy's CEO Terry Lundgren on why the retail giant is still succeeding, despite a challenging economy
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This transcript is automatically generated
Tis the season for spending it is also the make or break time for our economy.
This year's holiday shopping season is taking on added importance businesses big and small struggling all year looking -- in the season by -- ringing up sales.
But what so many people still out of work is their hope for the holidays.
Department store giant Macy's is among the stores hiring thousands of seasonal workers.
And we spoke to -- -- CEO Terry Lundgren.
And I see you this is Macy's in this field -- part of Macy's is really.
Visit the lucrative field part in cases where it all began and is also the largest -- in the world how bad.
One point one million square feet of selling space and it's about the expanded one point two million -- -- -- Does this building this building the -- over a hundred years all be -- Macy's was just down down a bit god fourteenth street a 152 years that I.
If you don't live in New York is still no Macy and of course the most -- -- the Macy's day parade about everybody knows that that accessing Macy's I always ask Paul that he.
I'm looking around you know with the economy and I am what -- -- -- about it coming but this place looks then look like you're hurting.
Well this star is a pretty special place but -- you know our business here today is a five point 3% as same store sales that's in our industry that's like spectacular so we're having a great year -- -- five point 3%.
Well customers like what we have apparently and I think it's been on the number of strategies that -- executed over the last several years.
What is it like your products -- -- seven particularly different about your products that I see Ralph Lauren I -- other Mac products seem happy I -- he lies like this of the this got me something.
Different is the economy's picking up or -- better marketing -- Yeah I -- -- -- I think they'll parts of the economy I think you know Largo are are positive but it's not across the board.
In our case we're definitely taking marketshare -- -- season we see that.
We also allow.
Are seeing that the effectiveness of our strategy to be put in place which is a focus on consumers who live locally so.
We're trying to responded this customer -- the economy turns as well as -- local New York if tristate area customer but also crosses the stores we have across the country we're very focused on the local consumer.
I'm becoming -- at -- 170000.
Full time behind so you have season on -- for the outage has hired 70000.
Do employees for the for the holiday period but don't be worked out a -- that make it out right that's right but it's still 3000 more than we hired last year.
So we're hiring up we have 3000 more temporary jobs we also hired 4000 new permanent jobs -- that for the company this year as well.
Okay so it's not the situation where as a result of the economy downsizing employees -- -- -- -- -- I have.
-- last and hence they're in the season he -- and more so it looks like you have more but you really sort of feeling wholesome prior times.
Well it -- it's very simple and our businesses that you know what would what drives employee growth is is sales growth.
You know -- week when we grow our sales.
We grow our earnings we -- -- earnings we can add more and more people and -- more associates so that's exactly what's happening we're growing sales.
We're adding we're adding employees.
A better earnings for companies.
-- some sense of what percentage.
Your gross sales between -- Thanksgiving and the new year what percentage of years that.
-- -- -- How do we don't give out although as does the city he felt that I -- exact numbers but -- up it's a -- number I'm a big number you visit really ramps up.
You see here but you'll see all the way through -- the period of December 27 and 48 it just nonstop.
I -- you have an idea the industry in the industry not just Macy's but.
What do most people and retail expect you know what percentage of the year.
Is this time this time it did -- this holiday period about 30% of the annual annual business.
But it's even -- a higher percent of the annual earnings.
Other people they hire for seasonal jobs.
But between now and and the new year.
And do some like it full time jobs we will feel hostile and and establish themselves and you think they have what we can't we can't live without these X.
-- people and for instance they.
And luggage at the first no question about it.
Does that mean we will definitely picked off the very best of talent and we get the obviously a first look at them and see how well they do.
Selling under pressure and in the various departments and so obviously gonna wanna keep the very best people will do everything we -- to do that.
I love -- city competitors but I'm curious is there something.
That Washington could do or could not do that would help your industry as a whole.
No question about it.
You know what what I think the consumers looking for and business leaders are looking for -- certainty.
And so what we would like to know is.
What is our corporate tax rate going to be what is our individual tax rate going to be -- what can we count on for.
You know GDP growth in in the next couple of years what can we expect.
What can we count on and we don't know those answers and and we're obviously hall very hopeful to learn more and more you know as -- that the super deficit committee.
Takes that takes action and and is responsive to some of these questions.
It's giving no idea the corporate tax treatment if congress Sony what the corporate taxpayers can be for the next five years so you do have that certainly that you so much want.
What would be -- -- how would you executed them in what.
Show me how that actually that's certainly makes -- -- -- -- up or down you're gonna decide whether this country as a country to invest in -- you need to take your business elsewhere so that's gonna matter.
You know what is this -- -- mean in terms of employee tax was is gonna mean in terms of specific about how much is gonna cost you for health care.
What's is going to mean in terms of what should I expect my my selling general administrative expenses to to run that.
And if it's going to be higher.
What do what do I need to do to figure how to offset that because we're not gonna just let it -- rise we're gonna we're gonna offset so.
We need those -- -- to plan the numbers of people that we can afford to employ in and higher on a permanent bases and and what we can expect our runway to be our our shareholders are not gonna say.
Pay your -- you know Washington is not helping you about it's OK if you make less money.
That's not how.
That's at how business works and so we're gonna have to scramble and do things differently.
To respond to what the new the new set of realities become well.
Maddening and ended that most demanding for business leaders he was CEOs.
They don't have that certainly users -- Washington a little bit sort of -- this logjam.
Not making those decisions whether it's up or down on corporate tax rate and it must be paralyzing in some ways.
And anyways it is.
I'm making investments in America because I believe in our company I believe in our strategy -- believe in our people what we're doing but I -- -- -- -- make the most money they do indeed and I'm and I'm counting on that.
Happening but the only way I'm doing it right now is taking market share from others.
All -- need to rise that's how you can't create jobs in America when all votes are rising meaning when.
When all -- performing retail impacts one in four jobs in America and think about the magazine business think that the newspaper business think about the shipping in delivering and packaging business all those various things.
We impacts so many jobs and if we if customers are buying -- customers customers are not feeling he feels confident about what they're gonna be able to keep.
At home they know whether they're keeping their savings account but they're not buying.
You know consumption is two thirds of of what -- GDP in America.
So you know customers are not -- there's no possible way that other pieces of GDP can make up for that lack of consumer confidence that's what I'm looking -- -- To to be corrected in 2000.
And and while and listen believing I'm optimistic.
I'm actually optimistic we're making these investments to -- I think the -- it's a right to do for our company but I also optimistic that that we're gonna get our hands around this in Washington and I went.
I don't Angus and in the sense it your ears -- you're optimistic as are hoping that things are gonna go on a particular director of open accounts administered think these to be -- -- corporate tax but.
But it really puts you in a position some ways in certain rolling the dice.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- But I but in the sense that it isn't Macy's and maybe driving and doing really well but that means that the stored on the street may not be -- -- the consumption is not increasing your mistake -- consumption and somebody has exactly that is exactly correct and that is it.
It's gonna it's gonna be fine for Macy's you'd find for our company but it's not going to be fine for America with the American needs is to certain.
Aren't given idea is prince's let's take a China and a devaluation of its currency so products -- lower over there is that.
An impact on you and are -- icing on the retail level and the extent that people want to buy things cheaper mean.
Your shareholders want more money people want to -- cheaper things.
No question about it if you've got a handbag here and they're there they're very similar in terms of what that the details are those parts and one.
The handbag is fifty dollars and one handbag is 45.
Nine times -- -- -- meaning that the 45.
And -- got Ralph -- name monitor Michael Moore's name monitor coach name -- one of the idea that that creates that extra demand.
That's maybe a little bit different but that consumers definitely want.
-- -- And of course send them a promise of things get -- give you some certainly.
You and other business leaders that -- -- -- -- -- in my you can make your decisions not -- -- but I -- all businesses across the -- they're -- decide on capital investments big decisions.
You on in America or elsewhere because of what that certainty that's.
Missing but again I'm hopeful that we'll come and the -- very near future attacks frustrating.
That's frustrating of course I spent little time there and chairman of The National Retail Federation and so I spent a little time there.
Talking about these these very subject and how important their decisions are on American business.