Kohl’s takes drastic action to fix concerning customer behavior

Kohl’s (KSS) continues to suffer from a concerning pattern of customer behavior that has impacted its sales for several financial quarters, and the retailer is betting on a bold new plan to reverse the trend.

In Kohl’s second-quarter earnings for 2025, it revealed that its comparable sales decreased by 4.2% year-over-year.

Also, according to recent data from Placer.ai, Kohl’s same-store customer visits declined by 3.4% during the quarter.

Specifically in June, Kohl’s same-store foot traffic decreased by a whopping 7.6% year-over-year, aligning with an alarming decline in mall visits across the retail sector.

The decrease in sales and foot traffic comes after Kohl’s recently made several bold attempts to win back customers after sales declined during the first quarter.

In June, Kohl’s Chief Financial Officer Jill Timm announced during an earnings call that the company recently restored its investment in its jewelry business and added petites back into stores after receiving complaints from customers.

In addition, it increased the number of coupons it offers to customers. In July, Kohl’s also brought back its Summer Cyber Deals event, which offered shoppers “deep discounts” on family essentials such as footwear, apparel, home, accessories, and back-to-school items.

Kohl's is making some changes to win back price-conscious customers.

Image source: Joe Raedle/Getty Images

Kohl's flags a major problem in stores

During an earnings call on Aug. 27, Kohl’s Interim CEO Michael Bender said the company has noticed sales lagging in its women's business. Its men’s and kids categories faced the steepest sales decline, specifically in spring seasonal assortments such as shorts and tees.

Kohl’s footwear and small electronic business also underperformed during the quarter.

Bender said that the state of the economy is making consumers more careful about their spending as they grow concerned about tariffs and battle higher costs of living.

“Although we are encouraged by our second quarter results and the improved sales trend we saw throughout the quarter, we also recognize that consumers continue to be pressured and are being choiceful with their purchases,” said Bender. “Specifically, our lower-to middle-income customers remain the most challenged, while our higher-income customers have proven to be more resilient. These lower-to middle-income customers continue to prioritize value and are trading down into lower opening price point products.”

The pullback in consumer spending comes as consumer sentiment fell by 5% at the beginning of August, the first decline in four months, according to recent data from the University of Michigan.

Based on recent store traffic trends across the retail sector in August, R.J. Hottovy, head of analytical research at Placer.ai, said in a statement to TheStreet that consumers are shifting their spending priorities.

“As we move through August, it’s becoming clear that consumers are being more strategic with their store visits, prioritizing needs over wants,” said Hottovy.

“Categories like warehouse clubs and grocery stores continue to outperform the broader retail sector. The apparel category is also a bright spot, aided by strong back-to-school traffic to off-price retailers. In contrast, sectors like luxury department stores and home improvement are lagging as consumers become more measured with discretionary purchases – a sentiment echoed by management teams during this week’s Q2 earnings updates.”

Kohl's reveals a bold plan to reverse alarming customer trend

During the earnings call, Bender said Kohl’s is focused on making three crucial strategic changes in stores to help attract more price-conscious customers.

“Our efforts are focused on three key strategic priorities, all rooted in putting the customer at the center of our decisions and delivering the products and experiences they expect from Kohl’s,” said Bender. “First, offering a curated, more balanced assortment that fulfills the needs of our customers, next, reestablishing Kohl’s as a leader in value and quality, and lastly, delivering a frictionless shopping experience across our omnichannel platform.”

Bender acknowledged that Kohl’s has made mistakes in its product assortment that have driven away customers, so it is rebalancing it across key categories.

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“In recent years, Kohl’s focused too heavily on altering our merchandising assortment in order to attract a new customer,” he said. “This overemphasis led to unintentional displacement of products and categories that were important to our most loyal customers.”

He also said that Kohl’s previous decision to exclude a large number of brands from its coupon assortment also “created friction” in its customer base. To help fix this mistake, Kohl’s added back brands to its pool of coupons a few months ago, a lever it plans to pull once again to boost sales.

“Given the success from this change, earlier this month, we made the decision to launch a second wave of brand inclusions for smaller, more digitally native brands,” said Bender. “We will continue to analyze the performance from this initiative and make additional decisions as we continue to learn what is resonating with our customers.”

Kohl’s will also focus on simplifying its store layout and restoring Trip Assurance, which aims to improve the customer shopping experience.

“We know we currently have an inconsistent in-store experience without a unifying point of view of what we want the customer to feel when they walk in the store,” said Bender. “To bring our customer proposition to life in the store, we will be adjusting product flows and adjacencies, including fixture layout and product placement. As well as adding brand support, in-store marketing and visual presentation to provide more inspiration to our customers’ shopping experience. These changes include establishing a dedicated accessories pad, relocating juniors across from Sephora and moving active back to the men’s and women’s departments.”