People shop inside of a Costco warehouse store on in New York City. Amongst many other retailers, Costco announced lower than expected earnings this fiscal quarter.
People shop inside of a Costco warehouse store on in New York City. Amongst many other retailers, Costco announced lower than expected earnings this fiscal quarter. - 
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Jeff Horwich: Today we got our monthly look at retail sales figures from chain stores. And there doesn't look to be much to celebrate -- Americans seem to have throttled back on the shopping.

Let's flesh things out a bit with retail analyst Sucharita Mulpuru at Forrester Research. Thanks for being here.

Sucharita Mulpuru: Thanks for having me.

Horwich: So we are getting close to back to school shopping season here, and maybe we are even in it according to some people, but these results are not looking great so far. What's holding people back?

Mulpuru: Well the reality is that it has a lot to do with customer confidence, and we still have a pretty dismal unemployment rate. Those, I think, are the biggest drivers of the disappointment of many retailers, especially the weak ones getting weaker --you know, the Best Buys, I would argue Macy's is in that category, even Target. The big surprise for me was probably Costco, which usually fares better even when the economy is down. I think that they had a little bit of a unique situation, they probably overestimated their expectations. 

Horwich: It's not been gloom and doom one day after the other. We are seeing glimpses of lower gas prices, home prices are stabilizing in many places, the other day I reported out a number that suggested that retail rebounded a bit in recent months. So, what's your outlook?

Mulpuru: Well it's funny because Americans are kind of eternally optimistic. One month consumer confidence is low, you know it's like dieting -- you cut back one month and you're like 'ok, alright, I'll have a little bit of disposable income,' and you see the burst in spending again. So you know you're right. I think that was kind of the lesson from 2008, 2009, which was truly the dark days where there was a significant amount of a pullback because there wasn't a sense of what the future was. But, I think that biggest change is that there is a little bit more of managing to your budget, there's a sense of not wanting to spend beyond your means, definitely be cautious of where you expend your resources because you don't know what tomorrow holds. 

Horwich: Sure. Well, Sucharita Mulpuru, analyst at Forrester Research, thank you very much.

Mulpuru: My pleasure. 

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