Retailers post declines in June sales as consumers cut discretionary spending

In a blow to fabrication companies and retailers nationwide that are already struggling with their working capital, stores are reporting weaker than expected June sales numbers, particularly in mall clothing stores, the Associated Press reported.

Target Corp. reported a 6.2 percent decline in June, a steeper fall than the 5.6 percent expected by Reuters-surveyed analysts, the AP said.

Costco posted similar numbers, landing at a 6 percent loss.

Department stores, especially high-end retailers, saw significant losses - J.C. Penny dropped 8.2 percent in June sales, while Neiman Marcus fell 20.8 percent and Saks Inc. declined 4.4 percent, helped significantly by a designer sale event that pushed their sales up from the Wall Street expectation of an 11.8 percent decline.

"Consumers are under severe pressure on the job front, so discretionary spending is just not happening," Ken Perkins, president of retail consulting firm Retail Metrics LLC told the news provider, adding that the news does not bode well for the back-to-school shopping season - especially considering the fact that teen and youth retail stores saw among the most significant losses last month.

Although consumers have reported cutting back on their discretionary spending, the latest Discover U.S. Spending Monitor revealed that 33 percent of consumers currently rate their finances as good or excellent, holding steady since the previous month.