Retailers, consumers and prices
Check Out Line: Weak economy keeps socking it to retailers
Discount retailer Target Corp rang up its fifth consecutive lower quarterly profit, suspended almost all of its share buyback program and cut capital spending plans as cash-strapped consumers shifted away from its trendy merchandise to staples like food and toiletries.
Meanwhile, Lowe’s Companies, the No. 2 home improvement retailer, posted a lower profit, but even worse cut its fourth-quarter profit forecast below Wall Street’s expectations, citing rising unemployment, falling home prices and tight credit as reasons homeowners are putting off some renovations and purchases.
Most economists say the U.S. economy is in recession and will shrink even faster in the fourth quarter. The news reflects the pressures consumers are under.
The result? Fewer shoppers plan to use credit cards to buy gifts this holiday season and most have yet to complete their gift buying as retailers brace for their worst holiday season in about three decades. In fact, more consumers are simply putting away their plastic.
Also in the basket:
J. Crew Benefits as Mrs. Obama Wears the Brand (N.Y. Times)