Economists Say Consumer Spending Not To Blame For Struggling Retailers' Weak Results

Dead mall

These days it seems retail execs are blaming weak consumer spending for the challenges they're facing in the retail environment. But economists say the truth is consumers are just spending money in different ways.

Cowen & Co analyst John Kernan told Bloomberg the metrics related to consumer shopping are healthier now than they have been in the past couple of years. “The consumer is in a very good position right now," he says, thanks to low gas prices, seemingly nonexistent inflation, strong job gains and wage increases.

But top execs at major brands like Target, Gap and Barnes & Noble insist the horrible retail environment is to blame for companies' weak results, Bloomberg reports.

In truth, Kernan says, it’s a challenging environment for specific companies whose product has become less relevant. Amazon is one obvious culprit—according to Bloomberg data, 55% of all product searches in the US begin at Amazon.com. At the same time, the US consumer is shifting to spend more money on experiences, like travel and classes, and less on retail. [Bloomberg]

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