Wal-Mart Stores, Inc. (WMT), Macy’s, Inc. (M), J.C. Penney Company, Inc. (JCP): If The Economy Is Improving, Why Are These Retailers Failing?

While projections vary between different analysts and companies, one outcome that is seen as highly unlikely is a strong revival of the low to middle-income consumer. The higher payroll tax is not likely to go away anytime soon, and the overall economy remains stubbornly slow in its recovery. At least in the near future, consumers are likely to only spend on essentials. “The U.S. consumer is weary in this turnaround. It has been quite anemic, relatively speaking. I think many of them just don’t see it on Main Street,” said Eric Beder at Brean Capital LLC.

The Foolish Bottom Line

Even as the overall U.S. economy has appeared to be improving, low to middle-income Amercians have continued to feel pressure when it comes to discretionary spending. This trend has been confirmed by the financial results of 4 of the largest retailers in the world.

This trend of stagnating spending is likely to continue, but a sliver of hope is still held in the back-to-school season outperforming. Innovative company strategies may help out individual players in the industry. Overall, Macy’s, Inc. (NYSE:M) is the best positioned, as its Bloomingdale’s segment exposes the company to the prospering high-end consumer. However, all names are likely to be dragged lower by declines in the retail industry.

Investors should watch consumer spending and confidence levels for a read on the health of the consumer, as well as track the number of Americans received food aid for a more accurate representation of the health of the low to middle-income American.

The article If The Economy Is Improving, Why Are These Retailers Failing? originally appeared on Fool.com and is written by Ryan Guenette.

Ryan Guenette has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

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