Walmart drops expectations and so does everyone else

Walmart didn’t do as well as expected, so that has caused several other retail outlets to drop their sales and earnings expectations for the upcoming quarter. The result has been at least a little nervousness on Wall Street, and a less-than-rosy view of the U.S. economic recovery.

The New York Times reports:

“There is a certain segment of the population that is faring well in this economy and have seen their net worth rise sharply with stock and housing market gains,” said Ken Perkins, president of Retail Metrics. “Then there is the much larger segment of Americans that are working in low-wage jobs, part-time jobs, that are struggling to make ends meet and are living paycheck to paycheck. They are not spending beyond necessities.”

In a call with reporters Thursday, Walmart’s chief financial officer, Charles M. Holley Jr., said there was “a general reluctance of customers to spend on discretionary items right now.”

With the holiday shopping season on the horizon, the big question for retailers apparently will be “what do people consider ‘discretionary’ and what do they consider ‘necessities’ as far as holiday purchases are concerned?”