Ex JCPenney CEO Allen Questrom: Sales have 'become a cancer' for department stores

"The sale has become a cancer" for department stores feeling increasingly out of touch with millennial and Generation Y shoppers, former JCPenney CEO Allen Questrom told CNBC on Tuesday.

"When business gets tough, we add another sale," Questrom told "Squawk Box," noting that there are plenty of brick-and-mortar stores like Zara and Uniqlo that do very well without perpetually offering sales to boost business.

"Sale cannot be the only driver [of business], it has to be a part of it. But product, presentation, excitement in the stores, the salespeople in terms of servicing the customer" must all be present for stores to draw foot traffic, Questrom said.

The CEO said part of the disruption comes from department stores counting too heavily on the baby boomer customer, whose "brands and ... aspirations are different" than the millennial customer's.

"They need to understand the millennial ... needs inspiration, not aspiration. They come from a whole different era," Questrom contended.

He added that while department stores need to get on board with internet retail to boost profits and accessibility, online businesses like Bonobos and Warby Parker have realized they need to include the brick-and-mortar experience in their businesses as well.

"Even Amazon sees [that] for them to continue to grow they need to be able to have a visual, personal space, which is a store," Questrom said.

"I think stores will always be around, they'll always be the majority of the business, but the retailers of the past have to understand how to utilize [the internet, and] they also have to understand who their customer is today. It's different than it was 10, 20 years ago," he said.

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