Ullman says Penney benefits by serving the "middle third" of the country, where people aren't "living paycheck to paycheck." Still, all bets are off if a weak economy grows really sick.
Nick Birchfield of Garden City, Mich., is still shopping at Penney, but that could change. If the economy gets much worse and gas prices rise higher, he says, "I will not be shopping at J.C. Penney unless they are giving their merchandise away."
Neiman Marcus is preparing for a possible sales slowdown, recognizing that while affluent customers might not trade down to lower-quality stores, they might buy less even if they remain loyal.
The luxury retailer may adjust the amount of merchandise in stores, but otherwise is "just continuing business as usual," says spokeswoman Ginger Reeder.
Neiman "knows how to react," to economic troubles, Reeder says. That means preserving its customer service and high-quality merchandise but adjusting its inventories to concede the reality that its customers may be tightening their snakeskin belts.
"We've found our customers are very resilient," says Reeder, referring to Neiman's history during past economic slowdowns. "They're not trading down but might potentially buy less."
As at other luxury retailers with strong presences in California and Florida, Neiman's sales have suffered along with their customers' finances during the housing recession, says Craig Johnson of retail consulting and research company Customer Growth Partners. But for the "premier luxury retailer in the U.S," in Johnson's words, suffering means merely moderate sales growth — down from double-digit increases in recent years. "As the economy stabilizes and spring returns, we look for improving results," Johnson says.
Neiman's focuses its promotions on two major sales a year, which Reeder says won't change.
In this economy, sales figures show, the safest demographic spot for retailers to occupy is either the low end or the very high end. "Middle-market department stores continue to bleed market share to discounters such as Wal-Mart and TJX, to high-end players like Saks sks and Neiman Marcus and to hot specialty stores such as Anthropologie," Johnson says.
As Reeder suggests, those who remain loyal to Neiman's through economic turmoil are typically those who prize quality over price.
"I still shop at Neiman's and will continue to," says Amy Cavers, of Skillman, N.J. "If things worsen or my budget gets tighter, I may cut back on my volume if anything, but not where I shop. I still want the same quality in my purchases. … I would rather have fewer shoes and dresses but with the same uniqueness and flair or style that I expect."
Jennifer Stillman of Atlanta says that rather than cutting designer labels out of her apparel budget, she's buying groceries at Wal-Mart and Costco cost over pricier markets such as Whole Foods wfmi.
The nation's largest department store chain concedes that the economic slowdown has forced it to put off plans to scale back its sales and promotions.
"We still believe the strategy is a good one, but the timing not necessarily good," says CEO Terry Lundgren.
In 2006, Macy's said it was trying to wean customers off frequent sales in favor of its "Every Day Value" pricing. Though Lundgren says there were slightly fewer promotions in 2007 than in 2006, he says Macy's won't reduce the timing or the number of sales until consumer spending starts to bounce back.