Consumers remain nervous about the economy, with more than three-fourths believing the U.S. is still mired in a recession, according to surveys and retail reports released Thursday.
Major retail stores, including Target, J.C. Penney, Kohl’s and Gap, reported April sales declines, offsetting what had appeared to be forward momentum in March.
Three of every five surveyed Americans say they are shopping only for necessities instead of splurging on discretionary purchases, according to a telephone poll of 1,000 consumers by America’s Research Group and UBS Global Equity Research.
“I’m still on a tight budget. It’s clearance racks only for me,” said part- time retail clerk Dan Best, shopping for socks and T-shirts on Thursday at T.J. Maxx in downtown Denver.
Thursday’s stock-market plunge could further diminish consumer confidence and limit spending, retail analysts said.
The surveys and sales reports suggest a disconnect between economists who cite statistical improvements in the U.S. economy and consumers who remain guarded.
“Nobody has told American consumers that the recession is over, although some officials have rosy predictions of growing consumer spending,” said C. Britt Beemer, chief executive of Charleston, S.C.-based America’s Research Group. “We’re seeing a lot of people on the edge of financial distress.”
A survey by Worthington, Ohio-based BIGresearch showed 77 percent of respondents saying the recession is not yet over. About half of those surveyed said they have become “more practical” in their shopping compared with pre-recession activity.
Shoppers in downtown Denver on Thursday expressed a mixture of caution and carefree spending.
“I feel a little better about the economy,” said Amanda Young, an employee at Gary-Williams Energy Corp. “I’ve been focused more on essentials, but today I’m kind of on a shopping spree.”
Recent college graduate Libby Napoli went into Banana Republic seeking only a bracelet for a gift but ended up leaving with a sweater, a tank top and shoes in addition to the bracelet.
“I finally have a paycheck, so I’m enjoying being able to spend a little,” said Napoli, who works at a commercial-real-estate firm.
But Sue McKinney of Denver said she is “still definitely cutting back on spending.”
“I don’t see many signs of us coming out of the recession,” she said. “My husband doesn’t feel too secure about his job, so we’re treating this year pretty much like last year — only the necessities.”
Sales at major department stores increased 0.5 percent in April, lower than the 1.7 percent increase predicted by analysts in a survey by research firm Thomson Reuters.
The strongest performers included Costco, up 11 percent; Nordstrom, with a 7.5 percent gain; and T.J. Maxx parent TJX Cos., up 4 percent.
Steve Raabe: 303-954-1948 or sraabe@denverpost.com
