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Q3: Peaks, Valleys and Closures

Ethan Chernofsky
November 5, 2019
Q3: Peaks, Valleys and Closures

What do CVS, Office Depot and JC Penney all have in common? They’ve been pushed to close stores in 2019.

So we decided to analyze Q3 data to get a sense of the overall situation for these chains. Is there a silver lining to their difficult closure announcements or does it portend a future that could be rougher than desired?

Back to Schools Office Supply Boost

Office Depot saw a strong peak in August as would be expected for a store focused on supplies in the Back-to-School season, but unfortunately, the peak was not as high as the brand likely would have hoped for. While visits for Office Depot and Office Max were up in August, they were down year over year each month of Q3. Office Depot visits were down 3.8% in July, 1.5% in August and 14.5% in September. While the latter number reflects a trend that was felt throughout the retail world, the drops in July and August are worrying.

Especially, considering that Staples, a clear competitor in the space, saw modest growth. Staples enjoyed a minor 0.3% bump in July and a 3.4% increase in August. While they also went through a September decline, the drop was 9.4%, far less than what Office Depot experienced.

Critically, much of this is likely to do with the closing of stores throughout the country. Yet, the capacity of this brand to maximize a peak that is so critical to this sector will become something of key import to watch in the next year. Even more, whether any of these brands can find a way to drive a second, manufactured jump somewhere else in the calendar could give a key indication of who may prove the ultimate victor in the space.

Apparel Battle

JC Penney (blue) and Macy’s (red) have eerily similar numbers, but far more important than the absolutes are the trends they represent. Analyzing the period from September 2017 through September 2019, JC Penney saw a decrease in visits compared to their baseline in November and December 2018 compared to the same months in 2017. Yet, things look to be turning around, with August 2019 numbers rising 13.3% above the baseline for the period, above the 7.3% rise in 2018. 

Macy’s saw an even more promising result. While there was a decline in visits from November 2018 compared to the same month in 2017, there was a rise in December for that same period. Yet, the most interesting factor waited for 2019 where every month from January through August showed a marked improvement on the same month in 2018. 

And this places a huge emphasis on the potential performance in the Q4 holiday season. If Macy’s can continue their positive trajectory, November and December traffic could spike above any numbers seen in the last few years. JC Penney, on the other hand, will look to channel the summer success into something that rights the in-store holiday ship in 2019.

Diagnosing Pharmacy Leaders

While Walgreens had a strong quarter in some respects, their recent earnings led to a drop as a result of expected store closings and layoffs. With the larger number of locations, Walgreens does see more traffic on a weekly basis than competitor CVS. And with a series of new initiatives on the way alongside their positive summer traffic momentum, there is certainly a silver lining to their recent performance. Yet, the ‘smaller’ CVS does see their traffic trend very closely with Walgreens giving a unique place to analyze their performance.

And this may bode especially well for CVS. CVS saw a strong summer with July and August visits that were 8.3% and 7.8% above the same months in 2018, with September seeing a minor - relative to other top brands - 1.3% dip. With a series of new innovative concepts like their Health Hub rollout, CVS may be on track for even greater things moving forward.


There is a lot to be said about store closings. They can have a big impact on employees, the communities they serve and the property owners that house them. But, closures do not always mean a brand is in trouble. Often, it can be an indication of a more sophisticated approach to growth, with a reset that aligns expansion with more strategic perspectives and a great focus on retail footprint optimization.

How will these brands progress? Visit to find out.

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