Even discounters, which typically weather economic slowdowns better than full-priced stores, are getting bruised. Target Corp., which operates Mervyn's, Target Stores and Marshall Field's, and Kmart Corp. are also seeing March sales falling below expectations. Most retailers will report their March sales figures on Thursday. Still, not everyone is getting pummeled by the souring economy. Teen retailers such as Hot Topics and Pacific Sunwear of California continue to generate robust results, while drug chains, including Walgreen Co. and CVS Corp., recently reported strong earnings.
Drugstores fare better in slowdowns, since historically more people tend to get sick.
Its rivals RadioShack and Circuit City, however, are reporting declining profits. Luxury stores such as Neiman Marcus and Saks Fifth Avenue believe their customers are spooked, too. It ties back to the psychology of the stock market. The lowest-income consumers, who typically do not own stocks, are getting hard hit by rising utility bills, he added.