Wall Street Breakfast Flat retail sales highlight K-shaped economy
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Feb 10, 2026 Retail sales stalled as high earners keep spending while mid and lower incomes pull back. Report highlights weak categories like furniture and department stores. Datadog and Spotify topped expectations and raised guidance. Paramount’s renewed bid for Warner Bros Discovery adds takeover drama. Goldman’s panic index points to elevated market fear.
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K-Shaped Consumer Recovery
- December retail sales were flat, missing expectations and slowing from November's growth.
- Heather Long calls it a K-shaped economy with strong top-end spending and weak middle/lower consumer demand.
Bargain-Focused Holiday Shopping
- Holiday shopping was solid but bargain-driven, with shoppers buying early to capture discounts.
- The middle class is gravitating toward value retailers, described as the "Costco economy."
Weak Categories Hurt Department Stores
- Certain retail categories lagged, with furniture and home furnishings down 5.6% year-over-year.
- Department stores also weakened, hurting chains like Macy's, Kohl's, and Dillard's.