Uneven Economic Recovery Affect Summer Retail Sales

While the housing market and stock market have been on a recent upswing, summer retail sales — particularly back-to-school sales figures — have not been, and are not predicted to be, stellar. Industry experts cite a number of factors, many of which have led to an uneven economic recovery that leaves the majority of American consumers short on spending money.

The payroll tax is cited by the New York Times as one of the most influential factors, leaving consumers with less money to spend per paycheck. And while there have been gains in the job market, they have primarily been in lower-paying and part-time job sectors — thus, while more people may be employed, there may also be more who are underemployed.

For discount and big box retailers this is particularly troubling, especially during the second largest shopping season of the year — back-to-school. Even teens, 35% of whom help purchase school and college supplies, are struggling. This, too, is affecting the summer shopping season.

The above factors have led retailers to lower their earning expectations nearly across the board — from Wal-Mart to Kohl’s and Macy’s.