Tomahawk, WI 08/14/2014 (Basicsmedia) – The retail sector continues to experience fair share of challenges in the market attributed to weak consumer purchasing power, according to Customers Growth Partners, Craig Johnson, in an interview on Bloomberg. Johnson expects consumers to remain extremely weak going forward in terms of their purchasing power something that is sure to affect the likes of Wal-Mart Stores, Inc. (NYSE:WMT), Macy’s, Inc. (NYSE:M), J C Penney Company Inc. (NYSE:JCP) and Kohl’s Corporation (NYSE:KSS).
Macy’s according to Johnson continues to perform extremely well in the industry despite headwinds that have been hitting it. Macys has already lowered its full year sales forecast as a result of the declining purchasing trends of consumers.
“Macy’s, Inc. (NYSE:M)’s operating about the best as well as a company can in very difficult choppy waters. Consumers are very weak now very reluctant to make any kind of big ticket purchase, and Macy’s is navigating these choppy waters about as well as possible. That being said, the consumer remains weak even looking forward,” said Mr. Johnson.
Wal-Mart Stores, Inc. (NYSE:WMT) having appointed a new CEO remains the most important of all the retail stores according to Mr. Johnson, as it perfectly reflects the general economy. At the peak of the recession 5-years ago, the giant retail store controlled 12% market share of the retail space, a margin that has declined to 11% as a result of an increase in competition in the space.
JCP, on the other hand, remains on a transition trail having lost $5 billion in sales under the leadership of former CEO, Ron Johnson. There is optimism that the company is making strides to come out of the mess according to Johnson, but maintains it is still early for the company to post impressive earnings.
“JCP is still a working progress; they have lost about $5 billion in annualized sales under the Ron Johnson era, some before and afterwards, so they are coming out of it. We think they will be okay tomorrow but a kind of only okay. Last time around they turned in about 6% comp change that is quite credible but very low base so they won’t match that we don’t think they will. They are still coming out of it,” said Mr. Johnson
Kohl’s Corporation (NYSE:KSS)’s according to Johnson is coming out of a tricky situation from its dismal previous quarter earnings and could be in line to post impressive earnings but not over the top as it used to do in the past.