80% of Consumers Believe Recession Will Last Three More Years: Retail Expert
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Despite falling retails sales and a decline in consumer confidence, the National Federation of Retailers expects Americans to spend more on back-to-school shopping this year versus last.
The industry advocacy group predicts the average shopper will spend $688 on items this fall, up from $603 in 2011, which would be the most money spent on back-to-school goods in the last decade. At the same time, PriceGrabber.com expects more than 60 percent of shoppers to spend at least $500 this year, versus 48 percent last year.
Forecasts suggest Americans will spend $30 billion on K-12 back-to-school items and more than $50 billion on college supplies, reports the Wall Street Journal.
This is welcomed news for retailers like Wal-Mart (WMT), Macy's (M) and Target (TGT) that are competing for shoppers' dollars. June retail sales fell 0.5 percent from May, marking the third straight month of declines —the first time that's happened since the height of the recession in 2008.
But some analysts who watch retail stocks are not as optimistic and have been lowering their forecasts for third quarter earnings. According to CNBC, Citigroup (C) has lowered its price targets for J.C. Penney (JCP), Kohl's (KSS), Macy's and Target.
Wendy Liebmann, CEO and Chief Shopper of WSL/Strategic Retail, conducts surveys of consumers recent shopping habits and sentiments. In the accompanying interview, she joins The Daily Ticker to discuss her findings and what they suggest about the state of the U.S. consumer: It's bleak!
Eight out of 10 Americans told Liebmann they "think the recession will last another three or more years," she says. It is an across the board sentiment, she adds, and people are being smart with their money any way they can by using coupons and shopping sales.
Americans have been on a "tremendous rollercoaster" and remain wary about the job and housing markets, she says. Even lower energy prices have not convinced consumers to go out and shop.
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