“Consumers are very much need-based,” said Ken Perkins, president of RetailMetrics, a retail research firm. “If they’re buying a new car, that leaves less money for a child’s wardrobe.”
That trend has weakened the sales and profits of retailers like Macy’s. On Wednesday, Macy’s reported a disappointing profit for its second quarter and cut its outlook for the year.
And Wal-Mart, the world’s biggest retailer, issued an earnings report Thursday that intensified worries about the strength of U.S. consumers, long a driving force for the global economy.