Easter sales were “well below expectations” said JC Penney, which expects a low double-digit decline in like-for-like sales in March and a high single-digit decline for the first quarter. As a result, the retailer expects first-quarter earnings to be 33 per cent lower than expected.
JC Penney chairman and chief executive Mike Ullman said: “Consumer confidence is at a multi-year low. JC Penney counts half of American families as its customers and they are feeling macro-economic pressures from many areas, including higher energy costs, deteriorating employment trends and significant issues in the housing and credit markets.”
MHE Retail chairman Edward Whitefield said: “When personal incomes are under pressure, marginal customers will move down from middle-market operators such as JC Penney to lower price operators Wal-Mart and Target.”
In an effort to revive the flagging economy, the US government plans to introduce US$300 billion (£150.94 billion) of tax rebates to consumers starting from June. However, Ullman said: “While the economic stimulus package may provide some temporary benefit, we expect the continuation of a difficult environment over the course of 2008.”
No comments yet