Retailers, consumers and prices
Check Out lower quarterly results at Neiman Marcus — the latest in a string of results proving that high-end stores are running into the same trouble as their lower-tier peers.
The company, known for its namesake and Bergdorf Goodman stores, said on Wednesday that quarterly sales fell almost 1 percent to $1.06 billion, while net profit fell nearly 7 percent to $55.4 million.
Less than a month ago, upscale department store operator Nordstrom reported lower profit and sales, citing a challenging retail environment — a sign that luxury retail, considered more insulated from economic volatility, may not be fully immune, as rich but increasingly wary consumers witness skyrocketing gasoline and food prices, and plummeting homes values.
Even Saks reported a lower-than-expected profit last month, as markdowns hurt gross margins.
According to interviews Reuters conducted with consumers across the United States over the past week, the answer seems to be that most of the extra money will be heading toward the basics — like food, fuel and credit card payments — with just a little left over for splurges.
Late on Wednesday, Starbucks said it would slash U.S. coffee store openings through 2011 as it adjusts to slower U.S. growth.
The coffee giant blamed the domestic housing crisis for a significant quarter-over-quarter deterioration in U.S. customer traffic and said it saw early signs of a potential traffic slowdown in the United Kingdom, which may be related to economic problems there.