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Macy's hits the discount mall

A pedestrian passes a Macy's store along the Magnificent Mile, Feb. 2, 2009 in Chicago, Ill.

Kai Ryssdal: Used to be you had your discount stores and you had your upscale stores, and never the 'twain did meet.

The last couple of years, though -- pretty much since the recession -- shoppers don't care what status the store comes with. They just want the best deal they can get -- online, high-end or discount. Maybe that's why the full-price department store Macy's has decided to open a new store outside Chicago in what's traditionally considered an outlet mall.

Marketplace's Janet Babin reports.


Janet Babin: Gurnee Mills Mall is a place to buy upscale leftovers at last-chance prices. Now, Macy's runs lots of sales, but it's no discount store.

And Macy's Jim Sluzewski says the company doesn't intend to become one either. He says the outlet center offered Macy's an opportunity.

Jim Sluzewski: For us, this was a piece of the Chicago metro area where we had a gap in our store coverage.

But the real gap may be between what consumers expect and what full-price stores can offer, especially with so many choices available online and through mobile devices.

Michael Dart is a retail strategist at Kurt Salmon. He says consumers want one-stop shopping.

Michael Dart: The store used to be at the center, now the consumer is in the center. You have to go to where the consumer is, and you can't expect the consumer just to automatically come to where you are.

And since the recession, consumers can increasingly be found discount stores in malls, and online, lured in by flash sales -- those deeply discounted exclusives that last only a few hours.

Christina Norsig of Pop-Up Insider says Macy's is looking for a way to keep up.

Christina Norsig: Times are changing. They have to find their place. I still think it's a dangerous move for someone like Macy's to do that. It could hurt the brand image.

But with fashion becoming so price-competitive, that's a risk Macy's is willing to take. The new store opens in the spring of 2013.

I'm Janet Babin for Marketplace.

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