Adriene Hill: This week we're finding out how department stores have been faring. Macy's and Saks are in good shape; today, Kohl's says its yearly sales rose. Department stores can tell us a lot about the health of the economy -- at least part of it.
We've got Marshal Cohen with us now. He's chief retail analyst with NPD Group. Good morning.
Marshal Cohen: Good morning.
Hill: So what does the most recent round of earnings reports tell you about the middle class? How are they doing?
Cohen: The middle class is actually starting to show some signs of recovery. They're tired of living in this spending cocoon; not really getting help from the government, not getting any jobs programs. And even tax-free days we had last year and the prior years -- nothing is really helping the consumer along. Now they're faced with even higher gas prices. But the consumer is telling us: you know what, if we have a product that we need and we want -- and the retailers are going to give it to us at a good price -- we're going to spend.
Hill: So where are you seeing that? Where are you spotting those trends?
Cohen: The luxury sector has already recovered. They've done a good job of being able to now anniversary, those lower numbers, the consumer has come back for them. The lower-end consumer is still the one that shows the most signs of being challenged. The middle class is telling us that close to $4 a gallon nation average isn't going to sway their spending much at all.
Hill: So they want that new sweater, but maybe they want it on sale, is that right?
Cohen: That's exactly right. The consumer is being groomed yet again -- like we groomed them over the past decade -- that at holiday, the longer you wait, the better you'll be rewarded with better deals. The consumer now is being groomed to learn at least some time during the month, every retailer is going to offer a sale. And the consumers are willing to wait for those sales.
Hill: Marshal Cohen with NPD Group. Thanks.
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