My list of types of retail stores sorted by prices charged, from high to low, goes like this:

luxury goods

specialty retail

department stores, to the degree they still exist

Target

supermarkets go in someplace around here

Walmart

dollar stores, with Dollar General at the top and Ollies at the bottom

thrift stores

home gardens, other non-listed low-end retail.

In economic expansions, consumers typically trade up; in contractions, they trade down. So you can get a quick and dirty view of how the economy is doing by watching how the escalator is operating.

One of the notable aspects of the second half of the Biden administration is that shoppers seem to me to have ridden up to Walmart, but no farther. Part of that is that I think Walmart (I own shares) has done a surprisingly good job of holding on to customers who might otherwise have ridden higher.

Where are we now?

WMT recently reported that it expected subdued same sales growth for this year, with maybe +3% vs. a pre-Trump goal of +5%. Tariffs–now in place–would dent that. TGT just reported that it expects a same store sales decline in the current quarter, followed by maybe flat.

Sounds to me like the start of an economic contraction. If so, the Fed will, sooner or later, step in to lower short-term interest rates. This is a plus, in that it makes borrowing cheaper, but maybe also a minus–if it causes currency weakness that raises the cost of foreign-sourced goods.

Not a pretty picture.