2 out of 3 Americans have adopted a habit that's killing department stores

Before you go, we thought you'd like these...
Before you go close icon
Cramer: 'Department Stores Are Really Struggling'

Discount stores are crushing department stores as a growing number of Americans refuse to pay full price for anything.

Consumers started gravitating toward discount stores during the recession, and many have failed to return to shopping in full-price stores.

Off-price buyers now account for two-thirds of all consumers, according to a new study by industry research firm The NPD Group.

Their buying activity has hit the clothing market the hardest. Off-price buyers are "hardcore apparel purchasers," representing 75% of apparel purchases across all retail channels, according to the study.

That's bad news for department stores like Macy's, Nordstrom, and Kohl's. All three retailers have off-price brands, but they make less profit off their discounted apparel, and sales are sliding at their full-price departments stores.

Macy's same-store sales fell 7.4% in the most recent quarter, Nordstrom's fell 1.7%, and Kohl's dropped 3.9%. Shares of Macy's and Nordstrom have lost about 50% of their value in the last year, and Kohl's stock price has fallen 40%.

RELATED: Struggling department stores

7 PHOTOS
Struggling department stores
See Gallery
Struggling department stores
TORONTO, ONTARIO, CANADA - 2016/03/08: Sears store entrance, is an American chain of department stores. Known for selling high quality clothing article from shoes to shirts. (Photo by Roberto Machado Noa/LightRocket via Getty Images)
Macy's Inc. signage is displayed at a department store in New York, U.S., on Monday, Feb. 22, 2016. Macy's Inc., the largest U.S. department-store company, is scheduled to report fourth-quarter 2015 earnings before the opening of U.S. financial markets on February 23. Photographer: Michael Nagle/Bloomberg via Getty Images
J.C. Penney Co. signage is displayed outside of a store at the Gateway Shopping Center in the Brooklyn borough of New York, U.S., on Saturday, Aug. 8, 2015. J.C. Penney Co. is scheduled to release earnings figures on Aug. 14. Photographer: Michael Nagle/Bloomberg via Getty Images
UNITED STATES - JUNE 09: Customers enter the Dillards department store at Parkdale Mall, in Beaumont, Texas, Wednesday morning, June 9, 2004. A judge declared a mistrial in a lawsuit brought against Dillard's Inc. by 17 black shoppers in Texas who claimed that security guards at the department store chain harassed them because of their race. (Photo by Scott Eslinger/Bloomberg via Getty Images)
MIAMI, FL - APRIL 19: A Nordstrom sign is seen outside a store on April 19, 2016 in Miami, Florida. Nordstrom on Monday said in a cost-cutting measure they are expecting to lay off 350 to 400 people. (Photo by Joe Raedle/Getty Images)
The sign outside the Kmart store is seen in Broomfield, Colorado November 19, 2009. Sears Holdings Corp posted a narrower-than-expected quarterly loss November 19, 2009, helped by the first increase in same-store sales at its Kmart unit in four years. REUTERS/Rick Wilking (UNITED STATES BUSINESS)
of
SEE ALL
BACK TO SLIDE
SHOW CAPTION +
HIDE CAPTION

"Off-price retailers are resonating with fashion and cost-conscious consumers alike, and are stealing department store business for good reason," Marshal Cohen, chief industry analyst for The NPD Group, said in a statement. "Off-price is second only to the online channel in terms of growth rate."

Shopping visits made to off-price retail stores increased by 4% in the 12 months ending April 2016, compared to same period last year, according to the study.

"Consumers are clearly looking for better deals and they know if they shop at an off-price retailer they will get them," Cohen said. "Apparel shoppers are finding just what they want at off-price retailers at the right time and at the right price, and that isn't always the case with department stores."

Off-price buyers are a difficult group to attract and retain, because they are not very loyal to any single brand, NPD said. They tend to shop at multiple off-price retailers as well as other retail outlets.

In addition to seeking out discounted merchandise, consumers overall are also starting to save more money, while splurging less on clothes, shoes, and other fashion items, studies show.

When consumers do shop, they are spending their money on "big-ticket" items like cars, houses, and electronics over clothes and shoes.

​​​​​​RELATED: 18 ways to save $100

19 PHOTOS
18 ways to save $100
See Gallery
18 ways to save $100

1. Keep the change

Retain the change from each of your transactions for an entire week and store it in a Mason jar, Ziploc bag or piggy bank. At the end of the week, count the coins to see how you did. Depending on how much you spend, you may reach your goal by following this one simple tactic.

Via MoneyTalksNews

Photo: Getty

2. Reduce transportation costs

Download the GasBuddy or GasPriceWatch.com application onto your smartphone to locate the best deals in the local area on gasoline. You can also try carpooling with others from your job, or using public transportation for a week.

Via MoneyTalksNews

Photo: Getty

3. Avoid restaurants, coffee shops for 1 week

Brew your own coffee to start the day and use the leftovers from the prior night’s meal for lunch. Also, decline invitations from colleagues to eat at restaurants at lunch this week. Pack your lunch instead, and invite them to join you in the park or plaza.

Via MoneyTalksNews

Photo: Getty

4. Skip costly entertainment

Don’t plan on going to a play or the movies. An alternative is to find free entertainment at local community events. There’s also the library, which is jam-packed with books and DVDs that you can borrow for free.

Be sure to check out: “More Fun, Less Money: How to Save on Entertainment Costs.”

Via MoneyTalksNews

Photo: Getty

5. Find free workouts

Try finding fitness programs on television or the internet, or at the library. I prefer SparkPeople because it’s a fitness hub with a variety of workout plans, many of which can be customized. It also offers meal plans for those looking to get fit.

Consider canceling your gym membership and instead embracing the great outdoors or group workouts. Check the local recreation or community center for free exercise classes.

Via MoneyTalksNews

Photo: Getty

6. Carry cash only

Force yourself to save by setting a cash-only budget for the week. Take out a set amount of cash from the ATM at the beginning of the week — then leave debit and credit cards at home — and stretch your cash throughout the week. It will keep you focused on spending for essentials only.

Via MoneyTalksNews

Photo: Getty

7. Sell some stuff

Head to a local consignment shop or a retailer, such as a Plato’s Closet, that will pay you on the spot for gently used goods. Can’t find one in your area? Try hosting a garage sale, or set up shop at the local flea market.

Via MoneyTalksNews

Photo: Getty

8. Get to work

Pick up a temporary side gig to quickly accumulate funds. Or, let your creative juices flow and sell your products and services to others.

Check out “20 Odd Ways to Make Extra Money.”

Via MoneyTalksNews

Photo: Getty

9. Clip coupons

No newspapers lying around? No problem. Head on over to a website like The Krazy Coupon Lady or Coupon Mom, where you will find printable coupons and corresponding instructions for putting the coupons to use. In some cases, a coupon can actually qualify you for cash back from the store.

Via MoneyTalksNews

Photo: Getty

10. Call your car insurance company

Inquire about any discounts that may be available. Also, raising the deductibles on your auto and homeowners insurance will drop your premiums. Just be sure you have money in savings to cover your increased out-of-pocket expense in case you have to file a claim.

Via MoneyTalksNews

Photo: Getty

11. Decrease your energy consumption

Reach out to your utility company to schedule a free energy audit of your home. Also, unplug any chargers or appliances that are not in use.

Set the thermostat a little higher to cut your air conditioning bill. Lower the temperature in winter and layer up on clothing. Also, consider hanging your clothes out on the clothesline to give the dryer a break.

Via MoneyTalksNews

Photo: Getty

12. Don’t use your credit card

A high interest rate can greatly increase the cost of things you buy with your credit card if you don’t pay off the balance in full each month. Hide the magic plastic, and don’t increase the amount you owe on the card.

Via MoneyTalksNews

Photo: Getty

13. Disconnect the cable

Freaked out by this suggestion? At least shave off the extras and try online television instead. Also, inquire about any discounts on bundles for which you may be eligible.

Via MoneyTalksNews

Photo: Getty

14. Skip the spa

It’s always great to pamper yourself, but it can also add up quickly. My last spa visit, which consisted of a manicure, pedicure and massage, cost well over $100.

Via MoneyTalksNews

Photo: Getty

15. Iron your own clothes

You can iron shirts and blouses, can’t you? No need to pay a professional unless an article of clothing truly requires professional handling by a dry cleaner.

Via MoneyTalksNews

Photo: Getty

16. Call your cellphone provider

If the provider isn’t willing to reduce your monthly bill, switch providers or get a prepaid plan. Also, check out the free or steeply reduced price options. They do the job just as well as the big boys. I know from experience.

Via MoneyTalksNews

Photo: Getty

17. Track your expenses

The simple act of paying attention to all of your daily expenses may be motivation enough to spend less. Join a free expense-tracking service like PowerWallet, then check in daily to see where your money’s going. PowerWallet will automatically send you money-saving coupons based on what you’re buying.
For some additional inspiration for getting expenses under control, check out: “How to Reach Your Goals Without Making a Budget.”

Via MoneyTalksNews

Photo: Getty

18. Pick up some free cash

Does your employer match retirement contributions? Add another $100 to your 401(k) contribution and get a free $100 from the boss.

Here’s some guidance on how much you should put into your 401 (k) or other retirement plan for the maximum benefit.

Via MoneyTalksNews

Photo: Getty

of
SEE ALL
BACK TO SLIDE
SHOW CAPTION +
HIDE CAPTION

NOW WATCH: The famous #FollowMeTo Instagram couple who travel the world together are the new faces of one of Macy's brands

More from Business Insider
We went to Macy's and saw why the brand might be headed the way of Sears
McDonald's is catching up to Chipotle, Shake Shack, and Panera
It's Amazon Prime Day — here are 5 great deals

Read Full Story

Markets

S&P 500 2,191.95 0.87 0.04%
DJIA 19,170.42 -21.51 -0.11%
NASDAQ 5,255.65 4.55 0.09%
DAX 10,513.35 -20.70 -0.20%
HANG SENG 22,564.82 -313.41 -1.37%
NIKKEI 225 18,426.08 -87.04 -0.47%
USD (per EUR) 1.07 0.00 0.06%
USD (per CHF) 1.01 0.00 -0.01%
JPY (per USD) 113.48 -0.41 -0.36%
GBP (per USD) 1.27 0.01 1.16%

From Our Partners