"The other guys are doing better, and that's kind of a soul-searching moment for anyone in retail," Cramer said on "Squawk on the Street."
Macy's reported mixed third-quarter results on Wednesday, with earnings per share beating expectations while revenues missed. The company also posted a 3.6 percent same-store sales decline.
Still, Cramer said there is no excuse for the retailer to be performing this poorly.
"It's a competitive world out there, and it looks like they've missed it," he said. "To excuse them is to say that J.C. Penney is not doing right and that [Target CEO Brian] Cornell is not doing right."
Macy's shares tumbled over 13 percent in midmorning trading.
DISCLOSURE: Cramer's trust owned Target's stock when this article was published, but did not own shares of Macy's or J.C. Penney.