According to John Mercer, the head of global research at Coresight, a retail data firm, discretionary spending in middle markets for goods such as apparel, home goods, and accessories are among the hardest hit by the current economic climate. Even cheaper brands like Ross and Burlington, which typically perform well in economic downturns, have tempered their expectations for growth.
"The margin for error in the event of a downturn in employment and the economy is very, very little," said Brandon Svec, the head of U.S. retail analytics at CoStar Group. "The upside appears to be relatively minimal, as well, given how little consumers have left in the tank."