We're in the dog days of summer, and the retail sector is in a rut. If companies can't blame the weather, what can they blame?
This week, many CEOs started pointing to the economy.
Rent-a-Center CEO Robert Davis says macroeconomic pressures are hurting his customers.
"Macroeconomic pressures continue to burden our financially constrained customers contributing to softer than expected demand in our U.S. business segments," Davis said, in his company's earnings release on Thursday. Warning that revenue and earnings for the second quarter of this year will not meet expectations, he said, "We are not satisfied with our second-quarter results and hold ourselves accountable for improving our performance."
Employers have started hiring again, but that boost isn't translating to a jump in consumer spending, said Wal-Mart U.S. CEO Bill Simon.
"We've reached a point where it's not getting any better, but it's not getting any worse—at least for the middle (class) and down" said Simon, in a Monday interview with Reuters.
Container Store CEO Kip Tindell said American retail is simply in a "funk." His company's net sales totaled $173.4 million in the first quarter, an increase of 8.6 percent over the year-ago period.
"We thought our sluggish sales were all because of weather and calendar shifts that began last November and continued into the spring, but now we've come to realize it's more than weather and calendar," Tindell said, in his company's earnings statement on Tuesday. "Consistent with so many of our fellow retailers, we are experiencing a retail funk."
Discounters aren't immune to the trend. In fact, Family Dollar CEO Howard Levine said in a Thursday conference call that the situation is only getting worse for lower-end consumers.
"The low-end consumer has not benefited in this recovery at all; in fact I think (they) have slipped further back," he said.