• by Thom Forbes  @tforbes, May 14, 2015

With retail sales flat last month, Macy’s said yesterday that it would be taking about 150 of its stores slightly upscale, Walmart announced a free-shipping program like Amazon Prime (without the music, video or other perks) and J.C. Penney posted a smaller loss than analysts expected as outgoing CEO Mike Ullman told analysts that the faltering chain is “switching gears from defense to offense.”

“Retail sales barely budged in April, confounding projections for a small increase, figures from the Commerce Department showed Wednesday,” according to a Bloomberg brief. “That followed a 0.2% drop from January through March that marked the first quarterly decline in almost three years.”

“Although some experts had predicted pent-up demand would push shoppers into stores once the weather thawed, many consumers opted to pay down debt or sock away their savings from cheaper gasoline prices,” writes Shan Li for the Los Angeles Times. “And now that fuel prices have rebounded, shoppers have even less cash to splurge on trips to the mall.”

It’s a scenario that does not bode well for coming months. 

“The extended penny-pinching is raising doubts about whether consumers will be the engine of economic growth this year that economists anticipated as business investment continues to languish,” writes Paul Davidson for USA Today, pointing out that “Americans were expected to finally splurge in April.” 

Economist Andrew Labelle of TD Economics tells Davidson that “other forces might be at work, including spending cutbacks by retiring Baby Boomers and the inability of Millennials to replace their purchasing power as they struggle in the job market.” 

“The weak retail sales trajectory was underscored by Macy's Inc., one of the largest U.S. department store retailers, which reported a 13.8% drop in first-quarter net income, blamed on the weather, the port disruptions and the dollar,” Reuters’ Lucia Mutikani reports. “The company, which operates more than 850 stores throughout the United States and U.S. territories, said tourist spending at Macy's and Bloomingdale's stores was down sharply.”

But the retailer also unveiled “plans to add higher-end merchandise to some of its 150 best-performing stores and [said it] may remove some clearance goods from its top 30 locations to make room for fresher products,” Suzanne Kapner and Chelsey Dulaney report for the Wall Street Journal. “The best stores will also get larger stocks of popular items, redesigned departments, additional staff, new technology and enhanced visual presentation.”

“If you think about it, the top malls in the country are doing extraordinarily well, as are we,” CFO Karen Hoguet told analysts on a conference call transcribed by Seeking Alpha. “But we think we can actually push that growth further.”

Another way Macy’s hopes to grow, it announced last week, is with off-price stores of about 30,000 square feet called Macy's Backstage, CNBC’s Reem Nasr reports. The first four pilot stores — “built from scratch over the past six month,” according to a release — will open in the metro New York City area later this year. 

“Macy’s Backstage stores will be designed to surprise and delight customers with continuously updated and fresh merchandise assortments focused on delivering current fashion with incredible prices, day-in and day-out, and enthusiastic sales associates,” said Peter Sachse, Macy's chief innovation and business development officer.

J.C. Penney, meanwhile, “was one of the few retailers to highlight stronger sales early in May,” writes Brian Sozzi for The Street. “Based on our results to date, including a strong Easter and Mother's Day, we feel confident in raising our 2015 expectations for sales, gross margin and SG&A," said president and CEO-designee Marvin Ellison.

“We're focused on taking back market share and restoring the profitability of our business,” current CEO Ullman said in a conference call transcribed by Seeking Alpha. “During the first quarter, the strength of our strategic initiatives and solid execution help us meet or exceed our expectations on a number of key metrics.”

Ellison singled out growth in the men’s and women’s apparel categories — “especially tailored clothing in men’s and in women’s, dresses and handbags,” as well as strength in Sephora Inside JCPenney. He called the latter a “point of differentiation that cannot easily be replicated in our industry … that helps us create an emotional connection with our customers that result in more trips to our store with high rates of conversion.”

Walmart, meanwhile, “is preparing to test a new, unlimited shipping service that will compete to some extent with Amazon Prime, but at a lower price point of just $50 per year,” reports Sarah Perez for TechCrunch. Offered by invitation-only this summer, it will guarantee free delivery in three days or less.

“One of things that we’ve heard from customers is that they want shopping that’s predicable and they want it to be affordable,” said spokesman Ravi Jariwala. “[This test is] really to understand is this yet another new way that we can serve customers?” 

It’s a question all the more imperative for all retailers as customers unpredictably tighten their fists around the dollars they’ve struggled to earn and apparently yearn to save.