Macy’s US ended its last fiscal year on a negative note. The tone of that note has not changed, but the volume has increased as the iconic department store group kicks off its new year with an even more somber set of figures.

On a year-over-year basis, total sales declined by 7.4 per cent with comparable sales on an owned basis (excluding licensed revenue) down by 6.1 per cent.

That the results are significantly worse than any in the past year, and that they come off the back of a shrink in the prior year, serves as a warning that Macy’s various strategies are not bearing fruit and that the department store continues to lose relevance with consumers.

Admittedly, the retail market as a whole has been soft across most of the year so far, but it has remained in growth and has allowed other retailers to post modest positive gains. As such, while Macy’s has been buffeted by some unfavorable headwinds – including unseasonal weather – the sales slide as an indicator of wider structural issues within the department store segment as a whole – mainly as consumers continue to migrate to other outlets and channels. It is also emblematic of internal problems at Macy’s, which despite a frenetic pace of activity at boardroom level, has done seemingly little to enact change at shop floor level.

The blunt truth is that Macy’s does not give consumers a reason to visit its stores. In many locations shops are simply not up to par: they are poorly merchandised, hard to shop, lack any inspiration, and have fairly mediocre customer service. Some of this is about a lack of capital investment, but some is about a lack of basic shop-keeping standards.

To be fair there are some initiatives in the pipeline to try and change this. One of these is the roll out of a new jewellery concept to 350 stores following a successful trial late last year. Another involves more exclusive product launches, including some supported by celebrities like Elton John and Lady Gaga. These things are directionally correct, but they will only fully deliver if they form part of a wider strategy to improve the overall shopping and store experience at Macy’s.

The attempt to shift perceptions are hampered by Macy’s muddying the water by including the Backstage discount concept in mainstream stores. This serves to underline that Macy’s is both struggling to make its existing space productive, and that it still lacks the differentiation and brand strength to pull in customers on the back of its full price offer. It is a move that will confuse both the proposition and customers.

None of this is to suggest that Backstage is not a sensible idea, per se. Given the success of Nordstrom’s Rack concept it is clearly something that has potential; not least because it gives Macy’s a route by which to clear excess inventory and an offer to tap into the discount focused segment of the market. However, like Nordstrom and Rack, it is vital that there is a degree of separation – both physical and emotional – between the two parts of the business.

Fortunately for Macy’s, while net income has declined the group remains in the black. This gives it some room to maneuver – a luxury that other players, like Sear’s, don’t have. However, this does not mean that Macy’s has time on its side. The market will remain fairly lacklustre, just as the pace of consumer change will remain rapid. Against this backdrop Macy’s will need to work far hard in order to stabilise its position in the market. Even then, change will not be delivered right away. There are too many issues and weakness within the business that still need to be resolved.

As such, this current fiscal year will likely be one of continued decline with further erosion to both the top and bottom lines. However, it is also the year in which Macy’s needs to take decisive corrective action if it is to avoid becoming a retail irrelevance.

• Neil Saunders is CEO of retail analysts Conlumino.