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The expected slowing of retail sales in the United States is attributed to two problems: One is consumers may be more cautious with their spending as home values fall and gasoline prices remain high. The other is stores may not be doing as good a job of stocking desired merchandise as they could.

July sales show  a gain of 2.6 percent for retailers, in contrast to last years' 3.9 percent same-store sales growth, which is considered the best indicator for retail store health. It doesn't sound as bad as it may look, as expectations had been for 2.3 percent growth for the fiscal year, which began in February.

The conclusion that retailers aren't offering the best merchandise is based upon some of the drop in sales connected to teen sales, which are strongly resistant to macro-economic issues.

Some retail executives blamed the tax holiday shifts in Florida and Texas as a contributor to the problem, but the West Coast and Midwest also suffered downturns in the teen markets, which they aren't able to explain. Not a good sign for the industry.

Others say as far a retail clothing goes in reference to teens, they may be transferring their spending dollars to the consumer electronics space, buying up cellphones, music devices and laptop computers. In other words, they're buying up stuff they can use while they're mobile.

Another factor says they stores is the trend of starting classes later by schools, which delays spending on school supplies and clothing. But responses to that are if there was a clear fashion trend the need to wait wouldn't be there, implying there was a weakness in the clothing industry in general as far as finding what teens wanted.

Leading retailer Wal-Mart's (WMT) profit margins were under pressure as they discounted back-to-school prices heavily to get more people in the stores. Even so, same-store sales grew by 1.9 percent, beating estimates of 1.5 percent analysts felt they'd reach.

For Wal-Mart competitor Target (TGT), they continue on a solid growth pattern as same-store sales grew by 6.1 percent, also higher than the projected estimate of 5.9.
 
Other big winners were J.C. Penney (JCP), which enjoyed a strong growth of 10.8 pecent in same-store sales.

Nordstoms (JWN) was close behind with same-store sales of 9.4 percent, as high-end consumers continue to spend. This was huge as expectations were for only 4.2 percent gains.

Costco (COST) was also strong with a reported 7 percent growth in sales, beating the expected 5.5 percent forecast.

Big losers for the quarter were American Eagle Outfitters (AEO) which has a shockingly bad quarter, as expectations were for a 2.9 percent increase in same-store sales, but they dropped by 6 percent instead.

Gap (GPS) continues its woes as they plunged by 7 percent in same-store sales, with expectations of a 4.9 drop by analysts.

Pacific Sunwear (PSUN) also was far below expectations as they were thought to able to bring a positive growth of 3.2 percent, but rather the bottom fell out as they dropped 4.6 percent instead.

The most unusual factor in all of this is the poor performance by store merchandisers in providing the types of goods wanted by younger buyers in the crucial school spending for the quarter. That, more than anything, kept the retail market from outperforming expectations in a big way.

Even with this, the sector look resilient and strong, resisting the concerns related to gasoline prices and dropping home prices.