Feb. 21 - Pain at the pump and a payroll pinch have consumers cutting back spending at retailers like Wal-Mart- which says sales will stall this quarter. Bobbi Rebell reports.
From the pain at the pump To the higher tax pinch in the paycheck. Consumers have less money to spend- at places like Wal-Mart. The top retailer reported disappointing sales in its fiscal fourth quarter- and says current sales have been flat. Greencrest Capital Chief Economist Max Wolff: SOUNDBITE: MAX WOLFF, CHIEF ECONOMIST, GREENCREST CAPITAL (ENGLISH) SAYING: "It speaks to a persistently high unemployment level, very low savings rates, house prices under water and the fact that the average American worker hasn't gotten a raise in 5 years." That Wal-Mart customer is considered to be a proxy for the average American- a consumer under financial pressure. On average, regular gasoline prices are up 47 cents in just the last month according to AAA. A new survey from the National Retail Federation shows seven in 10 Americans have adjusted their spending plans to cope with the recent 2 percent payroll tax increase And nearly half say they will delay major purchases- like cars, TV's or furniture. Wal-Mart is also blaming the delay in tax refunds- saying it's only cashed about half as many as it usually does by this time of year. But retail consultant Wendy Liebmann of WSL Strategic Retail isn't buying it: SOUNDBITE: WENDY LIEBMANN, CEO, WSL STRATEGIC RETAIL (ENGLISH) SAYING: "The tax refunds will get paid. If they get paid you know a little later they will still get paid. I think that is an external issue that yeah, yeah it has an impact in the short term while people wait if they were planning to buy something with those refunds but the reality is that that will go away that's just another excuse. " Another Wal-Mart problem: consumer sentiment among lower income consumers fell for a third straight month in January. WENDY LIEBMANN, CEO, WSL STRATEGIC RETAIL (ENGLISH) SAYING: "People say listen I'm just not going to go as often. I'll go to a little local place to get something- like a dollar store and I'll save my Wal-Mart big shop for next week instead of this week so that has a big impact when you have 100 million plus shoppers who basically use you as their core store, they cut back one trip in a month or in two months and it has a big impact." Wal-Mart is trying to entice consumers by offering products in smaller packaging- to make them more affordable.