Macy’s decision to close nearly a third of its stores will spark change in malls and communities across the U.S.

Some of those transformations may catch shoppers by surprise.

The retailer said in late February that it plans to close about 150 of its namesake locations by early 2027. Macy’s has not yet revealed which stores it will shutter. When CEO Tony Spring announced the move, he said the stores that Macy’s will close account for 25% of the company’s gross square footage but less than 10% of its sales.

The company plans to invest more in the approximately 350 namesake stores that will remain, and open new locations for its better-performing brands: higher-end department store Bloomingdale’s and beauty chain Bluemercury.

Yet the closures will be the latest catalyst that pressures malls to evolve to changing consumer tastes. Macy’s is shuttering stores as the growth of online shopping and demographic shifts mean some small towns or regions can no longer support a bustling shopping center.

Macy’s closures will ultimately be a good thing for many malls and customers, said Chris Wimmer, senior director at Fitch Ratings who tracks real estate investment trusts. The department store’s exit will accelerate the inevitable demise of “low quality malls that really don’t need to exist anymore,” Wimmer said. The closures will give the owners of healthier malls a chance to breathe new life and relevance into a shopping center.

In those malls, which tend to have better locations and owners with stronger balance sheets, he said owners are “itching to get their hands on their Macy’s” and free up prime real estate.

Macy’s owns the majority of its namesake stores. That dates back to when mall owners would give department stores a space to draw shoppers and make money by charging other retailers rent.

Macy’s closures will also make way for real estate developments that may better match the changing demographics or economy of their surroundings, whether through construction of a medical building, a retirement community or a grocery store.

But Wimmer acknowledged some of the closed Macy’s may be a tougher sell, and their exit could be the nail in the coffin for a mall that’s becoming an eyesore.

“If it’s in a really bad location where no one wants to spend money to knock it down, then it could rot,” he said.

Shoppers walk through the Fashion Centre at Pentagon City, a shopping mall in Arlington, Virginia, February 2, 2024.

Macy’s is trimming its locations as department stores and malls alike dwindle.

Macy’s has left many malls already. It has closed more than a third of its namesake stores over the last 10 years. As of early May, the company had 503 Macy’s stores, including a small number of other concepts outside malls.

Other anchors have downsized or disappeared from malls, including Sears, Lord & Taylor and JCPenney.

The number of malls has shrunk as well. Real estate firms typically divide malls into class A and B, which have higher occupancy rates and lower sales density, and class C and D, which have lower occupancy rates and higher sales density.

There were 352 shopping malls classified as Class A and B at the end of 2016, according to company reports, S&P Capital IQ and Coresight Research. That fell to 316 malls by the end of 2022.

That decline is sharper among Class C and D shopping malls, which fell from 684 malls in 2016 to 287 in 2022, according to the companies’ research.

Weak U.S. malls have become weaker, and the strong shopping centers have become places where all retailers and consumers want to be, said Anand Kumar, an associate director of research for Coresight. He expects that trend to continue. By 2030, he said, top-tier malls will draw a greater share of total mall spending and more lower-tier malls will either close or be forced to convert more space into non-retail uses.

At some distressed malls, Macy’s may be the last anchor that remains.

Kumar said the U.S. doesn’t need as many malls as customers buy more on retailers’ websites. He added many of the fastest growing retailers in terms of store count, such as Dollar General, Five Below and T.J. Maxx, want to be in suburban strip centers rather than malls.

He said adding more diverse tenants to malls, such as medical buildings, co-working spaces, nail salons and restaurants, can be a smarter move for mall owners to drum up traffic.

That’s what many mall owners have done and could do with vacant former Macy’s locations.

Even if a mall wants to fill a Macy’s space with a retailer, there are few single tenants that can take up the whole box, said Naveen Jaggi, president of retail advisory services at JLL. The ones that could, such as Nordstrom and Belk, generally aren’t opening up huge stores like they did in the past, he said.

Macy’s stores typically range between 200,000 and 225,000 square feet.

Stonestown Galleria is an example of how a mall can change after Macy’s closes. The mall, which is in San Francisco, has a Whole Foods, movie theater, sporting goods store and a healthcare facility where the department store once was.

If history is a guide, former Macy’s stores will likely transform into spaces and spark projects that surprise longtime mallgoers. The closures of mall anchors have cleared the way for new apartment complexes and entertainment wings with restaurants, amusement parks or activities such as laser tag and rock climbing.

Since 2012, major mall owner Brookfield Properties has redone more than 100 anchor boxes with capital investments of more than $2 billion.

One of the malls it retrofitted after a Macy’s closure is Stonestown Galleria. In the San Francisco mall, a former Macy’s is now a Whole Foods, movie theater, sporting goods store and health-care facility.

At Tysons Galleria in the Washington, D.C. area, Brookfield used the closure of Macy’s as an opportunity to tack on a new wing. It opened in 2021 with broader entertainment offerings, including a bowling alley and movie theater; home furnishing stores including RH and Crate & Barrel; new dining options and a showroom for electric vehicle brand Lucid Motors.

The projects take money and time, said Adam Tritt, chief development officer for Brookfield Properties’ U.S. retail portfolio. As part of the San Francisco conversion, Brookfield had to raise the height of the roof, add more windows and put in a glass storefront.

Those projects show that for mall owners, the closure of an anchor such as Macy’s can come with a silver lining, Tritt said. It clears the way for more flexible and creative uses that draw more people to the mall.

“There’s a collective challenge to get people off the couch and out of the house,” he said.

And by turning a big box into smaller retail or dining spaces that can be leased, the mall owner can be nimbler.

“We are able to break it down into smaller digestible pieces, so that as trends move and communities evolve we are able to respond more quickly,” he said.

At other malls, the tenants that replace a Macy’s could be even more unique.

Near Salt Lake City, Utah, a former Macy’s will soon become the location of the training and practice facility for the NHL’s new addition, the Utah Hockey Club, complete with ice skating rinks and corporate offices.

And in some parts of the country, consumers’ shift from shopping at malls to shopping on their couches has taken physical form. Amazon opened a huge fulfillment center on the former site of Randall Park Mall. The mall in Northeast Ohio struggled with dwindling occupancy rates and ultimately lost mall anchors, including Dillards, JCPenney and Macy’s.

And earlier this summer, Amazon opened another fulfillment center in Baton Rouge, Louisiana — also on a former mall site.

Consumers grew more confident in July that inflation will be less of a problem in the coming years, according to a New York Federal Reserve report Monday that showed the three-year outlook at a new low.

The latest views from the monthly Survey of Consumer Expectations indicate that respondents see inflation staying elevated over the next year but then receding in the next couple of years after that.

In fact, the three-year portion of the survey showed consumers expecting inflation at just 2.3%, down 0.6 percentage point from June and the lowest in the history of the survey, going back to June 2013.

The results come with investors on edge about the state of inflation and whether the Federal Reserve might be able to reduce interest rates as soon as next month. Economists view expectations as a key for inflation as consumers and business owners will adjust their behavior if they think prices and labor costs are likely to continue to rise.

On Wednesday, the Labor Department will release its own monthly inflation reading, the consumer price index, which is expected to show an increase of 0.2% in July and an annual rate of 3%, Dow Jones estimates show. That’s still a full percentage point away from the Fed’s 2% goal but about one-third of where it was two years ago.

Markets have fully priced in the likelihood of at least a quarter percentage point rate cut in September and a strong likelihood that the Fed will lower by a full percentage point by the end of the year.

While the medium-term outlook improved, inflation expectations on the one- and five-year horizons stood unchanged at 3% and 2.8%, respectively.

However, there was some other good inflation news in the survey.

Respondents expect the price of gas to increase by 3.5% over the next year, 0.8 percentage point less than in June, and food to see a rise of 4.7%, which is 0.1 percentage point lower than a month ago.

In addition, household spending is expected to increase by 4.9%, which is 0.2 percentage point lower than in June and the lowest reading since April 2021, right around the time when the current inflation surge began.

Conversely, expectations rose for medical care, college education and rent costs. The outlook for college costs jumped to a 7.2% increase, up 1.9 percentage points, while the rent component — which has been particularly nettlesome for Fed officials who have been looking for housing costs to decline — is seen as rising by 7.1%, or 0.6 percentage point more than June.

Expectations for employment brightened, despite the rising unemployment rate. The perceived probability of losing one’s job in the next year fell to 14.3%, down half a percentage point, while the expectation of leaving one’s job voluntarily, a proxy for worker confidence about opportunities in the labor market, climbed to 20.7%, a 0.2 percentage point increase for the highest reading since February 2023.

Ford and Mazda have issued do-not-drive warnings covering more than 457,000 vehicles that contain recalled Takata airbags.

According to a release posted on the National Highway Traffic Safety Administration’s website, Ford’s warning covers 374,290 model year 2004-2014 vehicles comprising a range of models that were part of previous recall campaigns. It also includes Lincoln and Mercury vehicles.

Mazda’s warning covers 82,893 previously recalled model year 2003-2015 vehicles.

NHTSA urges owners of the vehicles to not drive them until a repair is completed and the defective airbag is replaced.

Ford customers should check the automaker’s recalls website to see if their vehicle is affected.

Mazda customers can visit the company’s recalls website for more information.

To date, NHTSA says 27 people in the U.S. have been killed by a defective Takata airbag that exploded, while at least 400 people in the U.S. reportedly have been injured by them.

Shares in Trump Media and Technology Group fell slightly more than 5% on Monday after the company reported scant revenues and a net loss in its first full quarter as a public company.

Meanwhile, Donald Trump returned to X early Monday in advance of his interview with X owner Elon Musk later in the day, raising some doubt about whether Trump would continue favoring Truth Social, the social media platform owned by Trump Media. In a fundraising email late in Monday’s trading session, however, the Trump campaign said he’s ‘back on X for a short time.’

Shares in Trump Media have been subject to significant volatility since it began trading in late March thanks in part to competing bets from Wall Street traders about how much the stock would fall.

But the stock has lost half its value since mid-May, and it has fallen more than 40% after a brief surge in the wake of the July 13 assassination attempt on Trump, the Republican nominee for president.

That has equated to billions in paper losses for Trump Media’s largest shareholder: the former president himself. Still, the company’s market value was $4.72 billion as of Monday’s close.

With rare exceptions, Trump has almost exclusively posted to Truth Social since it came into being in February 2022. But in its initial public offering, the company officially warned that if Trump stopped posting to Truth Social, investors would be materially harmed.

While Trump is contractually obligated to post on Truth Social before he does so on any other platform, the rule does not apply to posts related to his campaign and politics. Trump, who was once a prolific tweeter, last posted on X, formerly known as Twitter, in August 2023.

“They want to silence me because I will never let them silence you,” Mr. Trump said in a campaign video posted to his account Monday, which Musk reinstated in 2022 after Twitter’s former ownership banned it in the wake of the Jan. 6, 2021, riot at the U.S. Capitol. “They’re not coming after me. They’re coming after you.”

In its quarterly report, released late Friday, Trump Media addressed the launch of its streaming service, Truth+, this month. It also said it was exploring “numerous other possibilities for growth,” including mergers and acquisitions. It added it was debt-free and had $344 million in cash and cash equivalents.

“From the beginning, it was our intention to make Truth Social an impenetrable beachhead of free speech, and by taking extraordinary steps to minimize our reliance on Big Tech, that is exactly what we are doing,” CEO Devin Nunes, the former Republican House member from California, said in the quarterly report.

Coach Prime wants consumers to know they can watch DirecTV without a satellite dish. 

The company best known for providing the traditional TV bundle through satellite dishes posted on the sides of houses and on top of buildings is rolling out the next iteration of its ad campaign, “For the Birds,” with NFL star-turned-college football coach Deion Sanders joining the flock.  

The focus of the ad campaign: DirecTV is a streaming company, too.

As pay TV distributors — both satellite and cable companies — have seen customers flee for streaming, DirecTV is trying to get the message out that a clunky satellite dish is no longer needed for its service. 

“We’ve been selling a streaming product for some time, right? It’s not new to us. But many customers didn’t know,” said Vince Torres, chief marketing officer at DirecTV. “We built this as an alternative. … We know that 80% of people prefer not to put the dish on the side of their house.”

Further, the company’s research showed 75% of consumers thought a satellite dish was still required for DirecTV even though it’s had a streaming option since 2016, Torres said. “That’s a very, very large percentage of prospects.”

This research and shape-shifting media landscape led DirecTV to refocus its marketing efforts — even as Torres contends the company is still a satellite TV provider and values those customers.

The ad campaign that rolled out earlier this year features pigeons voiced by actors Henry Winkler and Steve Buscemi who look through windows while people are watching DirecTV, wondering how it’s possible without a satellite dish on their rooftop. 

The pigeons lament the loss of the dishes. Winkler’s Frank said he “loved doing my business on those things,” while Buscemi’s Bobby quips, “them dishes kept the rain off our beaks.” 

While the changes in media played into his interest in the commercial, Buscemi said in an interview he was sold on perfecting the voice and character of a New York City pigeon.

“For me, it was more about the creative part of it,” Buscemi said. “I just really thought these characters were very funny.”

There’s been a roughly 50% increase in prospects coming to DirecTV’s website since the launch of the ad campaign, Torres said.

Sanders’ inclusion comes just before one of the busiest times of the year for U.S. sports: beginning with college football and the NFL, followed by the start of the NBA and the NHL, as well as MLB’s postseason.

Sanders, once known as “Prime Time” in the NFL and now known as “Coach Prime,” as the coach of the NCAA’s Colorado Buffaloes, dons a cowboy hat and gold chain, essentially playing himself.

“We have a long history TOGETHER — dating all the way back to 2011,” Sanders said in an email interview. “It was only fitting for us to reunite once again. Coach Prime put his wings back on for DirectTV!”

In a 2011 ad campaign, Sanders was an NFL version of Tinker Bell, wearing a DirecTV football jersey under his wings. Sanders had been suspended on strings when filming that commercial, so voicing the pigeon has been a different experience, he said.

The industry has shape-shifted since Sanders’ last ad campaign with DirecTV, too.

Satellite TV providers like DirecTV and EchoStar’s Dish were once some of the biggest distributors of the TV bundle. The competition ramped up when cable TV companies began offering broadband.

For a while, the solution for satellite companies was then to concentrate on customers in rural areas, where cable broadband was sparsely available, said Craig Moffett, an analyst at MoffettNathanson.

But the rivalry between cable and satellite over pay TV subscribers has dissipated since streaming has caused many to ditch the bundle.

“All of this is in the context of the cord-cutting phenomenon, and the media companies taking more and more of their best content, including sports, and putting it on streaming platforms, so what’s left of the TV package isn’t very good to sell,” Moffett said.

The first quarter of this year was the worst ever for traditional pay TV subscriber losses, according to MoffettNathanson, which estimated that total losses topped 2.37 million for the first time ever.

Although DirecTV’s financials are now private — a result of private equity firm TPG acquiring a 30% stake in DirecTV from AT&T in 2021 — the company has roughly 11 million customers across satellite and streaming, according to people familiar with the matter who spoke on the condition on anonymity due to the private nature of the financials. MoffettNathanson estimates DirecTV added more than 20,000 streaming customers earlier this year.

The majority of those customers still have a satellite dish. For DirecTV’s streaming options, consumers can use their own device, like a Roku. But the company also provides its own hardware, called a Gemini box.

DirecTV offers two streaming options — DirecTV Stream, a contract-free internet TV bundle, and DirecTV via internet, which requires a signed contract and is only available through the Gemini device.

Based on Antenna data, DirecTV Stream has the smallest percentage of monthly gross additions when compared with Hulu + Live TV, Philo, Sling TV and YouTube TV — although it often is among the services with the lowest monthly rate of subscriber losses.

“The challenge for consumers now is that it’s increasingly difficult to find what you want to watch,” Torres said about the division of content among various TV and streaming services. “It’s our version of the entertainment industry’s road rage.”

The device allows viewers to switch between streaming apps like Netflix and the DirecTV guide without changing remote controls or inputs or leaving apps.

Other pay TV providers also offer similar options, such as Comcast’s X1 set top box, as well as the Xumo streaming device, a joint venture between Charter Communications and Comcast.

The “For the Birds” ad campaign for DirecTV emphasizes customers don’t need a satellite dish anymore for service. The pigeons are voiced by former NFL star Deion Sanders, and actors Steve Buscemi and Henry Winkler.

DirecTV also tries to set itself apart with a focus on sports, a main selling point for the company for some time.

Until the 2023 NFL season, DirecTV had been the sole provider of the “Sunday Ticket” package of games since its inception in 1994. Google’s YouTube TV, a competitor to DirecTV’s streaming options, is now the owner of the rights to “Sunday Ticket.”

But DirecTV still offers “Sunday Ticket” to bars, restaurants and other businesses, many of which rely on the subscription that shows all out-of-market NFL games to draw big crowds.

Nonetheless, streaming has also shaken up live sports, the highest-rated TV programming. Amazon’s Prime Video and Netflix have exclusive NFL games, while legacy media companies have nabbed exclusive game rights for their growing streaming services.

On the residential consumer front, DirecTV is still pushing the idea that it has the most complete live sports package offered by a pay TV and streaming provider. Its streaming offering includes all nationally broadcast games and regional sports networks — a rarity for internet TV bundles.

This is where Coach Prime comes into play ahead of football season, Torres said.

“He’s highly recognizable, he’s fun to work with, and he’s effective at getting messages out,” said Torres. “When you think about this challenge that we face, how do we continue to build on this brand message that we’re trying to educate the U.S. population with, who better to join the flock than Coach Prime.”

Disclosure: Comcast, which owns CNBC parent NBCUniversal, is a co-owner of Hulu.