Gloomy Days Ahead for Retailers

If sales weaken further after the stimulus checks are spent, a wave of bankruptcies may be forthcoming Congress probably wasn't thinking about food last winter when it voted to send stimulus checks to 130 million U.S. households. President George W. Bush and other leaders hoped the package, amounting to more than $100 billion, would grease the wheels for broad consumer spending, thus lessening the severity of housing's collapse. "The growth package has to be big enough to make a difference in an economy as large and dynamic as ours," Bush said. As the checks got cashed and consumer prices surged, however, large numbers of Americans spent the money in May and June on such basic needs as food, utilities, and gasoline. Sales at nearly all retailers—save for those selling low-cost food—were dismal. And that's proving to be a... [read full story]