Department Stores Market - Global Industry Size, Share, Trends, Opportunity, and Forecast, 2021-2031

The Global Department Stores Market is projected to expand from USD 122.45 Billion in 2025 to USD 174.58 Billion by 2031, reflecting a Compound Annual Growth Rate (CAGR) of 6.09%. Department stores are characterized as large-scale retail venues that provide a wide variety of consumer products, such as apparel, beauty items, and home furnishings, arranged into specific sections within a single building. Key factors driving this growth include rapid global urbanization, which gathers potential customers in major cities, and the growing middle class in emerging nations, which boosts demand for premium brands. Furthermore, the resurgence of international tourism acts as a vital economic stimulus, as these stores often serve as key shopping hubs for travelers in search of high-quality merchandise.

Despite these positive indicators, the industry faces substantial hurdles due to fierce competition from e-commerce platforms and direct-to-consumer brands, which are capturing market share through greater convenience. This structural transformation has imposed significant stress on brick-and-mortar retail performance and revenue growth. The impact of these pressures is highlighted by data from the International Association of Department Stores, which reported that in 2025, the average global year-on-year sales growth for the fiscal year 2023-2024 experienced a decline of 1.6 percent.

Market Drivers

Adopting seamless omnichannel and hybrid retail frameworks has emerged as an essential strategy for survival, allowing department stores to merge their physical footprints with digital accessibility. This methodology empowers retailers to utilize their physical locations as fulfillment centers while providing versatile shopping alternatives like click-and-collect and curbside pickup.

By aligning inventory across all channels, companies can manage stock more effectively and decrease reliance on markdowns, thereby competing better against digital-only rivals. For example, Nordstrom, Inc. noted in its 'Annual Report for Fiscal Year 2024', released in March 2025, that it achieved a 3.0 percent rise in comparable sales, a success credited largely to the synergy between its digital and physical operations. Concurrently, to refine efficiency within this hybrid model, Macy’s, Inc. confirmed in January 2025 that it would close 66 underperforming locations as part of a strategic effort to optimize its portfolio.

In parallel, the integration of artificial intelligence and data-centric personalization is transforming how the sector handles customer interaction and operational logistics. Retailers are increasingly utilizing AI algorithms to interpret massive amounts of consumer data, facilitating highly targeted product suggestions and dynamic pricing models that boost sales conversions.

Beyond customer-facing applications, these technologies automate intricate supply chain processes and forecast demand with improved precision to avoid expensive overstock scenarios. The financial benefits of this digital shift are substantial; a report by NVIDIA titled 'State of AI in Retail and CPG: 2025 Trends' indicates that 87 percent of retailers employing AI observed an increase in annual revenue. This technological evolution is crucial for traditional retailers aiming to restore profitability and relevance in a data-driven marketplace.

Market Challenges

The escalating rivalry from e-commerce platforms represents a significant obstacle to the expansion of the Global Department Stores Market. This digital transition is fundamentally reshaping consumer habits, as shoppers increasingly prefer the ease of exploring extensive online catalogs from home rather than visiting physical stores. Online retailers leverage lower operational overheads to provide competitive pricing and fast shipping, effectively undermining the value proposition of traditional stores that depend on in-person sales to offset high real estate and labor costs. As a result, established retailers are experiencing diminished foot traffic and lower revenue density, which directly impedes their capacity to grow or sustain profit margins.

This structural decline is underscored by recent industry statistics that reveal a growing performance disparity between digital and physical retail channels. According to the National Retail Federation, non-store and online sales were anticipated to increase by 7 percent to 9 percent year over year in 2024, a rate significantly faster than overall retail growth. This rapid acceleration of digital commerce compels department stores to adopt a defensive financial stance, resulting in market share losses to more agile competitors, suppressing overall sector development, and necessitating reductions in physical store networks.

Market Trends

The trend toward Localized and Curated Small-Format Store Concepts signifies a strategic move away from traditional large mall anchor stores, with retailers focusing on high-density suburban neighborhoods using more efficient layouts. By opening smaller outlets in lifestyle centers, companies can drastically cut overhead expenses while tailoring product selections to match local demographics. This strategy enhances customer accessibility, effectively establishing these locations as convenient points for both immediate purchases and digital order fulfillment. Demonstrating this robust expansion tactic, Fast Company reported in September 2024, in an article titled 'Nordstrom Rack opening new stores in 2024: full list and map', that Nordstrom had already launched 11 new sites year-to-date and scheduled 12 more openings by the end of the year to bolster its physical presence.

At the same time, the adoption of Sustainable Resale and Circular Economy Services is transforming the sector’s value proposition by emphasizing product durability over sheer volume. To appeal to environmentally conscious shoppers and compete with fast-fashion brands, department stores are incorporating permanent resale, repair, and rental services directly onto their main sales floors. This approach not only creates new revenue channels but also cultivates stronger brand loyalty through ethical practices and immersive "pre-loved" retail environments. Highlighting this operational shift, Sustainability Beat reported in April 2024, in the article 'Selfridges expands Reselfridges eco concept across all stores', that the retailer inaugurated a new 3,000 square foot circular fashion hub in its London flagship store as part of a broad rollout of sustainability measures across its network.

Key Players Profiled in the Department Stores Market

• Marks and Spencer PLC
• Macy's, Inc.
• Target Corporation
• Nordstrom, Inc.
• Walmart Inc.
• Isetan Mitsukoshi Holdings Ltd.
• Kohl's, Inc.
• Lotte Department Store
• Dillard's Inc.
• Selfridges Group

Report Scope

In this report, the Global Department Stores Market has been segmented into the following categories:

Department Stores Market, by Product Type:

• Apparel & Accessories
• FMCG
• Hardline & Softline

Department Stores Market, by Region:

• North America
• Europe
• Asia-Pacific
• South America
• Middle East & Africa

Competitive Landscape

Company Profiles: Detailed analysis of the major companies present in the Global Department Stores Market.

Available Customization

The analyst offers customization according to your specific needs. The following customization options are available for the report:

• Detailed analysis and profiling of additional market players (up to five).

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