Dive Brief:
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Wal-Mart Stores Inc. has lowered its fiscal year sales growth forecast from the 3% to 5% it predicted in February to 2% to 3%.
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The retailer, the country’s largest, cited a “tougher sales environment than it anticipated a year ago” for the tempered growth this year. Its fiscal year ends February 2015.
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The company also said it would slow the expansion of its physical retail stores and invest more in e-commerce.
Dive Insight:
Chalk this news up to that sense of a “retail funk” many economists say is due to continued tight budgets for lower- and middle-income consumers in the United States, even at a time of steadier economic growth overall.
Indeed, the progressive-leaning research and advocacy organization the Center for American Progress released a report detailing how many top retailers see a middle-class squeeze as hurting their business. The study analyzed retailers’ own reports and found that 80% of 100 major American retailers have told their investors that weak consumer spending is a risk to their stock prices. 66% say stagnant incomes and 57% say rising household expenses are major factors in keeping the country’s middle class from spending.
