Hesitant Consumers May Slow Sales This Summer Retailers were encouraged by an uptick in shopping earlier this spring. But more recent data suggest a slowdown at clothing and department stores. Consumer confidence measures are up, but without incentives, cash-strapped shoppers are likely to remain cautious.
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Hesitant Consumers May Slow Sales This Summer

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Hesitant Consumers May Slow Sales This Summer

Hesitant Consumers May Slow Sales This Summer

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DEBORAH AMOS, Host:

NPR's Joshua Brockman went browsing through the aisles to find out if consumers might be warming up to the cash register again.

U: Your total today is $53.85.

JOSHUA BROCKMAN: Are you wearing last year's T-shirt or last year's flip-flops?

AMOS: Yeah, definitely. I'm kind of hanging on to stuff. Before, if I had extra money, I would just let go of stuff that I bought last year or even like, two or three or four years ago. But now, like, that's not an option.

BROCKMAN: Morningstar retail analyst Kimberly Picciola says consumers remain focused on price.

AMOS: We think caution is lingering among many consumers, given the employment market and some uncertainty regarding the economy.

BROCKMAN: Laura Tabor from Napa, California, is also browsing the racks. She says she's tentative about whether or not she'll actually purchase anything.

AMOS: The fun is in the window shopping, or in the putting things in your cart online, but not necessarily hitting the checkout button.

BROCKMAN: Gault says the same is true in retail. For example, in March and April, many consumers bought energy-efficient appliances in response to the federal government's $300 million cash-for-appliances program. It was administered by each state, but spending tapered off in May when a number of state rebate programs ran out of funds.

AMOS: So the month-to-month volatility has been very much driven by incentives.

BROCKMAN: Going forward, Gault expects overall consumer spending to grow at about a 3percent annual rate. That's slower than the 4 to 5 percent growth he'd expect to see if we had a strong economic recovery under way.

AMOS: In general, consumers still have lost a lot of wealth. Credit conditions are tight, so they are really constrained by their income growth.

BROCKMAN: Historically, retailers have also counted on strong back-to-school sales. But Picciola, the Morningstar analyst, says retailers may face an uphill battle later this summer.

AMOS: It could be a difficult back-to-school season for some of these teen retailers, given where we stand with teen unemployment levels.

BROCKMAN: Joshua Brockman, NPR News.

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