Consumers began receiving their tax rebate checks last week, and at least one retailer is trying to live up to its motto of "saving people money so they can live better."
That was the goal that Sam Walton envisioned when he opened his first Wal-Mart 40 years ago. Last week, Wal-Mart Stores Inc. said it will cash the economic stimulus checks for free, with no purchase at the store required. Moreover, the discounter is offering rollbacks on prices of items from shampoo to lunch meat and cereal. Over the coming weeks, the Bentonville, Ark.-based discounter said it will add more rollback items to help shoppers stretch their dollars.
The retailer also plans to unveil an online advice program early this month to help consumers stretch their family budget.
But how much will actually be spent at retail remains to be seen.
A National Retail Federation survey conducted by BIGresearch concluded that consumers plan to spend 40.6 percent of the tax rebate checks, which is expected to provide a $42.9 billion boost to the economy. The balance is expected to be used for savings and paying down debt.
Trips to the grocery store and to eat out have become increasingly expensive, sapping consumers of at least some of their ability to make discretionary purchases.
White bread prices jumped 16.3 percent in March versus a year earlier, as milk prices advanced 13.3 percent and prices on all food and beverages inched up 4.4 percent, according to the Labor Department.
The pressure on budgets also expands well beyond food.
Household energy prices shot up 6.8 percent in March as the purchasing power of the consumer dollar slid 3.9 percent. And feeding the automobile has gotten expensive, too, as gasoline prices across the country are averaging $3.62 a gallon for regular, according to the American Automobile Association.
"Nothing influences a consumer more than the prices of groceries and food," said Richard Yamarone, chief economist at Argus Research Corp. "Gasoline prices, we complain about them, but if you adjust them and look at them in comparison with the world, they're not too bad."
Women who control household expenses tend to hold off on purchases for themselves as their visits to the grocery store become more expensive, he said."She'll get necessary bills paid, but she'll skimp on or postpone a purchase for herself," said Yamarone, noting women are apt to cut back on apparel as well as cosmetics and jewelry.
Customer Growth Partners president Craig Johnson said his firm has noticed a pickup in sales at retail in mid-April, with traffic in some malls and off-mall venues increasing. Wal-Mart and value chains such as TJX Companies Inc. are doing particularly well, he said.
"There are still some places in the ditch, such as women's apparel retailers, which are struggling," Johnson said.
While Johnson believes there's been a bit of pent-up demand among shoppers following the dreary winter months, he said that much of the pickup likely stems from the easing on home heating bills now that the calendar is shifting into spring.
"It's the time of year where many who run the household budget from paycheck to paycheck no longer have to worry about home heating bills. That's a $19 billion bill that now no longer impacts discretionary spending," Johnson said.
Apparel prices fell 1.4 percent in March as sales at apparel and accessories stores were down 1.6 percent and sales at department stores slid 4.1 percent, according to sales figures from the Commerce Department.
"If confidence is historically low and the economic news is we're in recession or near recession, the likelihood of people adjusting their behavior to go back to spending in restaurants or on high-end apparel or more discretionary items is going to be delayed," said Keith Stock, president of First Financial Partners Inc., a private investment firm.
In the end, it is the confluence of pressures, from high prices to slow economic growth, that really bites down on consumer spending.
"The problem is that consumers are so squeezed from so many different directions right now," said Scott Hoyt, director of consumer economics at Moody's Economy.com. "They've got the double whammy of food and energy prices."
These increases are happening against the backdrop that includes a weakening labor market, declines on Wall Street and ongoing trouble in the housing sector.
"To some degree, it's the fact that they're hitting in combination that's the big problem," said Hoyt.
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia
Azzedine Alaïa's “I-did-it-my-way” ethos stood out starkly at a time when brands are experimenting with consumer-facing fashion shows, coed formats and trans-seasonal collections – anything to perk up lackluster sales of ready-to-wear in an age of Insta-everything. “It’s not creation anymore. This becomes a purely industrial approach,” the late designer told WWD in an interview last year. “But anyway, the rhythm of collections is so stupid. It’s unsustainable. There are too many collections.” Read more about the iconic designer’s life and work on wwd.com, link in bio. #wwdfashion #azzedinealaia (📷: @WWD Archive, 1986) #alaia
Sneaker reselling app @goat’s latest exhibit, "The Greatest: New York," tells the story of New York's sneaker culture. To celebrate the exhibit, an intimate crowd gathered on Thursday night at the pop-up gallery space, located at Platform in Culver City, to hear guest speaker and illustrator @esymai talk about her own rise in streetwear and women in the business. "For me I'm just someone who is creative. I like to create things," said Chang. #wwdfashion
Azzedine Alaïa, one of the most iconic couturiers of the modern era whose body-con designs defined Eighties fashion, has died in Paris. The diminutive Tunisian-born designer, known for his structured knitted dresses with fitted waists and impeccably cut, figure-hugging second skin silhouettes was deeply admired by his peers, and counted supermodel Naomi Campbell - his adoptive daughter - among his inner circle, one of a gang of glamazons including Farida Khelfa, Carla Bruni and Stephanie Seymour who became ambassadors of his style. (📷: Alexandre Guirkinger) #wwdblast