Dana Telsey Talks 2025 Retail Recap

Summary

Bloomberg Talks: Dana Telsey Talks 2025 Retail Recap

Date: December 29, 2025
Host: Bloomberg
Guest: Dana Telsey, CEO of Telsey Advisory Group

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Episode Overview

This episode features retail analyst Dana Telsey as she provides a comprehensive recap of the 2025 retail holiday season and shares her outlook for 2026. The discussion explores sales trends, economic influences like tariffs and interest rates, the performance divergence between leading retail giants, and the future of department stores amidst industry disruption.

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Key Discussion Points & Insights

Holiday Season Sales Performance

• Solid Results in Line with Expectations
  • Holiday sales growth reported between 3.9–4.2%.
  • Telsey emphasizes the continued importance of the 10 days post-Christmas for gift returns and gift card redemptions.
  • "Product newness drove demand and with the K-shaped economy that we have, you're definitely seeing at the higher end and the lower end looking for value and that's where you saw some of the traffic." — Dana Telsey [00:58–01:36]
• Major retailers like Walmart and TJX captured substantial late-season traffic.

Divergence Among Retail Giants

• Walmart vs Target: Store Standards and Innovation

  • Walmart's modernization and anticipation of customer needs set it apart from Target, which lagged in product innovation and store experience.
  • "The Walmart of today is not the Walmart of five or even 10 years ago." — Dana Telsey [01:51–02:14]

• Off-Price and Discount Stores

  • Although dollar stores face challenges from tariffs, off-price retailers like Burlington, Ross, and TJ Maxx outperformed by offering a diverse assortment.
  • Dollar stores may benefit in 2026 as tariffs ease, improving margins.
  • "Who you saw as share gainers, it was all the off-pricers... TJ Maxx, with the diversification of the assortment that they have, they captured customers." — Dana Telsey [02:33–02:59]

Department Store Shake-Up and High-Profile Bankruptcies

• Saks Fifth Avenue's Potential Bankruptcy

  • Despite strong consumer spending, legacy retailers like Saks Fifth Avenue are under pressure due to heavy debt.
  • Brand and merchandise innovation at competitors (Bloomingdale’s, Nordstrom) taking share from struggling players.
  • "Just across the street on 59th Street, Bloomingdale's just opened a new extension to their fourth floor with newer brands... you're seeing it in Bloomingdale's and in Nordstrom." — Dana Telsey [03:24–03:55]

• Broader Pattern: The Big Get Bigger

  • Telsey highlights that financial leverage is critical — "it always takes a lot to kill a retailer."
  • Larger companies with resources to invest in technology and merchandise innovation are gaining share from weaker, highly leveraged competitors.
  • "Certainly, when one is weak, others can gain strength. And that's what you're seeing in Bloomingdale's and Nordstrom." — Dana Telsey [04:13–04:42]

Macy’s vs. Bloomingdale’s: A Study in Contrasts

• Macy’s Struggles, Bloomingdale’s Thrives

  • Despite underperformance in Macy’s stock, the company’s "bold new chapter" strategy is driving some positive change, especially with investments in top-performing stores and new formats like "Backstage" (its off-price channel).
  • Focus is on optimizing real estate and investing in locations yielding the highest returns.
  • "The investments that they've made into the top 125, 150 stores is outperforming the core. And I think you're going to continue to see the assessment of the footprint of Macy's continue to be architected towards their best performing stores over time." — Dana Telsey [05:01–05:39]

• Valuation Opportunity

  • Dana Telsey views the stock dip as a buying opportunity, citing Macy’s potential for appreciation given its strategic changes and relative valuation.
  • "Macy's has an opportunity on valuation to move higher." — Dana Telsey [05:42]

Retail Pricing and Consumer Behavior Outlook

• Expected Price Increases and Consumer Selectivity
  • Telsey predicts more price increases but notes innovation is key—when products are genuinely new, price comparisons are less of a factor.
  • Consumers remain cautious but will spend for uniqueness.
  • "You're going to see more price increases coming. But... consumers are cautious and discerning, but they'll buy what they don't have." — Dana Telsey [06:06–06:20]

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Notable Quotes & Memorable Moments

• On the K-shaped economy:
  "At the higher end and the lower end, looking for value and that's where you saw some of the traffic..." — Dana Telsey [01:00]

• On Walmart's evolution:
  "The Walmart of today is not the Walmart of five or even ten years ago." — Dana Telsey [01:51]

• On department store innovation:
  "You're seeing it in Bloomingdale's and in Nordstrom [with new brands on shelves]." — Dana Telsey [03:43]

• On retail bankruptcies:
  "It always takes a lot to kill a retailer. They don't just die overnight." — Dana Telsey [04:13]

• On Macy’s potential:
  "Macy's has an opportunity on valuation to move higher." — Dana Telsey [05:42]

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Timestamps for Major Segments

• 00:45 – Dana Telsey’s initial take on 2025 holiday retail performance
• 01:36 – Discussion of Walmart vs. Target
• 02:14 – The impact of tariffs and the outlook for dollar stores and off-price chains
• 02:59 – Saks Fifth Avenue potential bankruptcy and its ramifications
• 03:55 – The cycle of retail bankruptcies and share gain among strong players
• 04:42 – Macy’s struggles and the contrasting performance of Bloomingdale’s
• 05:39 – Is Macy's a buying opportunity?
• 06:06 – Price increase expectations and innovation’s impact on purchase decisions

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Summary

Dana Telsey provides a candid and optimistic analysis of the 2025 retail landscape, identifying both resilience and disruption in the market. Leading retailers with innovative products and savvy technology investments are outpacing competitors, while legacy players burdened with debt face existential threats. As the sector heads into 2026, look for increased price differentiation, continued store optimizations, and intensifying competition among department stores. Telsey notes Macy's as an undervalued opportunity and expects further change driven by shifting consumer expectations and economic trends.

Transcript

[A]

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[B]

Bloomberg Audio Studios Podcasts Radio News so let's stick with the consumer as focus shifts toward the New year. Data Telsey of a Telse Advisory group writing heading into 2026 we events higher reef tax refunds and more accommodative interest rates to drive a continued recovery in discretionary spending, especially among younger consumers. Dana joins us now in person. Thank you so much for being here.

[C]

Thank you for having me.

[B]

It's wonderful to get your insights as we all look at our gifts from the holidays, decide which ones we need to return. What's your read on how well this season really did perform for retailers broadly across the sphere?

[C]

I think holiday season was solid. I think those increases 3.9 4.2% cent very much in line with expectations. These 10 days after Christmas are very important to whether for returns for gift card redemptions. All very important to see what it looks like. But the product newness drove demand and with the case shaped economy that we have, you're definitely seeing at the higher end and the lower end looking for value and that's where you saw some of the traffic. Whether it's the Wal Marts, whether it's the TJ X's, they were there the last 10 days before Christmas. Christmas, as always is where you got the real bump up in terms of top line line.

[D]

I'm fascinated by the bifurcation between Wal Mart and Target because I had seen them previously in kind of the same box. But Wal Mart has done so well this year and Target has disappointed. Why?

[C]

I think overall what you've seen from Wal Mart and Target Target store standards have fallen. You haven't seen the same innovation and product newness. You haven't seen the same forward momentum of movement, particularly with technology where Walmart is anticipating what the customer needs and they really have modernized their whole store format. The Walmart of today is not the wal Mart of five or even 10 years ago.

[D]

If we see a K shaped economy, do we get Dollar Tree? You know these family dollar kind of discount stores doing well because if I look at the stock performance, I don't see Dollar Tree taking off.

[C]

I think overall you will see those dollar stores perform. Keep in mind that in 2025 the focus on tariffs who imports goods from China was impactful certainly to the dollar stores and now lapping tariffs should be a benefit to them over time, who you saw as share gainers, it was all the off pricers. I mean, whether it was Burlington Ross stores or TJ Max, with the diversification of the assortment that they have, they captured customers.

[B]

What's fascinating to me is you're talking about how this was a solid holiday season and yet we're talking about a bankruptcy potentially at the end of this month of one of the biggest retailers of Saks Fifth Avenue, which is faces more than $100 billion of a debt payment. A lot of people are wondering whether that will actually happen. Can you square this story? The idea that we're talking about robust sales, a steady consumer, albeit picky or choosy or whatever you want to say, at the same time that we could see a bankruptcy of one of the biggest retailers out there?

[C]

Well, when you think of who's gaining share from that, you look at the new brands that both Bloomingdale's and Nordstrom are putting on their shelves, stocking in their stores. They're gaining share. Just across the street on 59th Street, Bloomingdale's just opened a new extension to their fourth floor with newer brands. Whether it's Victoria Beckham, whether it's Valentino, Totem, they have a whole new assortment of goods out there that frankly, perhaps if not for this change, you would not see those brands in Bloomingdale's. And you're seeing it in Bloomingdale's and in Nordstrom.

[B]

How much is is a pattern that you expect to be repeated? That we're going to see wholesale bankruptcies of some retailers that are not keeping up with new product, while others. I'm thinking of Wal Mart or I'm thinking of Bloomingdale's, continue to gain share. Sort of the big get bigger can invest in technology and you see wholesale bankruptcies on the other side.

[C]

Financial leverage is very important in order to keep the operations of a retailer running smoothly. You get into trouble with financial leverage. That's. That's an issue. It always takes a lot to kill a retailer. They don't just die overnight. Take a look, for example, at Blockbuster from many years ago. And certainly we'll have to see what happens with that debt payment of Sachs that's coming due very shortly. But certainly when one is weak, others can gain strength. And that's what you're seeing in Bloomingdale's and Nordstrom.

[D]

We talk about Bloomingdale's. Obviously, it's a great store. It's iconic department store across the street here, but it's owned by Macy's and that Stock is down 30% this year. What's Macy's doing wrong that it's Bloomingdale's is doing right?

[C]

I think overall the bold new chapter strategy that the CEO of Macy's, Tony Spring has put in place, they're making advancements and you're seeing some change in Macy's. Also. You look this year at Macy's and what they've done, whether it's backstage with the off price in their assortment, whether it's what they're doing with luxury or whether it's what they're doing with their own brands and frankly the store experience, the investments that they've made into the top 125, 150 stores is outperforming the core. And I think you're going to continue to see the assessment of the footprint of Macy's continue to be architected towards their best performing stores over time.

[D]

You like Macy's? I mean, is this a buying opportunity then this dip?

[C]

I think Macy's is an opportunity. I think when you think about next year and you think frankly, think about the enhancements that they've made to assortment both in Macy's and Bloomingdale's. It's not expensive for where it is. And you look at the landscape of department stores that are public companies, it's Macy's, Kohl's and Dillard's. Macy's has an opportunity on valuation to move higher.

[B]

Dana, do you think that early next year we're going to see pretty big price increases across the board for retail goods?

[C]

You're going to see more price increases coming. But keep in mind this innovation and newness that we have, you don't have a comparative, so we'll have to see what those prices look like. Consumers are cautious and discerning, but they'll buy what they don't have.

[B]

Dana Telsey Wonder thank you. Thank you so much for being with us today. Happy New Year. Dana Telsey of Telsey Advisory Group.

[A]

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