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Low end retail stores struggle
By: Ruben Veloz
EL PASO, Texas- They're supposed to be affordable for families who are struggling to make a living, but a new report shows low-end retail stores may not be as affordable as they once were.
"It's tough, but it's life," said west El Pasoan Jorge Cadena.
Jorge Cadena is one of the many struggling Americans who count on low-end retailers to make ends meet.
"It's really hard out there we have to count every penny make sure to go to all the cheapest stores, make sure to count every green bean possible."
Many El Pasoans go to low-cost retail stores to buy groceries, but a new report shows even those stores may not be as affordable as they once were.
Profits at the nation's Family Dollar stores reported a disappointing drop last December.
Sears, and Kmart also reported low profits last month and are reportedly working on cutting prices.
Economists say it could be a sign of the weak economy for low- and middle-class families.
"It is a huge help, like $2 Windex at Albertsons compared to 50 cents at the Family Dollar store, so it's obviously a help, said Cadena.
Economists say recent cuts on government assistance programs are one of the reasons low end retail stores are reporting lower margins, and with millions of unemployment benefits cut last year the picture doesn't look any better.
In a statement, Family Dollar CEO Howard Levinsaid,
"Our core lower-income customers have faced high unemployment levels, higher payroll taxes, and more recently reductions in government-assistance programs. All of these factors have resulted in incremental financial pressure and reduction in overall spending in the market."
Cadena who lives on his own, hopes the report is not a sign that low-income families are struggling, but a sign that Americans are doing better and don't need to shop like they used to.
"Obviously there is going to be a struggle everywhere you go, but I think it's OK, for now."
While the nation's unemployment rate did drop to 6.7 percent in December, the percentage is still higher than what the nation saw during the late '90s and early 2000s.
Roughly 1.4 million Americans' unemployment benefits were cut last month.