WMT - As Student Loan Payments Resume Retail Analyst Predicts Consumer Shockwaves | Benzinga
After over three years of a pandemic-induced pause, federal student loan borrowers are bracing for the resumption of their monthly payments starting in October, potentially resulting in new spending patterns and financial stress for nearly 44 million Americans.
According to Jefferies, retailers could face headwinds, as indicated by the firm’s survey suggesting that the apparel, accessories, restaurant, and footwear sectors are poised to bear the brunt of the impact.
The Revival Of Repayments: The start of loan repayments is poised to curtail consumer spending significantly, Jeffries told investors on Monday.
Interest, frozen since March 2020, resumed its accrual from Sept. 1, with most borrowers scheduled to make their first payments in October. A key observation Jeffries made is that despite the looming financial commitment, about 31% of respondents have not initiated budgeting for the resumption of student loan payments.
Consumer Concerns, And The Retail Sector: Almost 90% of survey respondents expressed anxiety about affording their monthly expenses due to student loan payments.
Jeffries says sectors like apparel/accessories, restaurants, and footwear will see pronounced pullbacks in spending, impacting companies like Lululemon Athletica Inc (NASDAQ:LULU), Foot Locker Inc (NYSE:FL), ...