Retailers are flashing warning signs of tough times ahead. Here’s why Walmart and Costco are poised to win if things worsen, while department stores could suffer. Shoppers are changing their behavior as the US braces for the possibility of a recession. Dollar stores and value-focused brands like Walmart, Costco, and Burlington stand to benefit. But higher-end department stores and mid-range brands, already seeing slower sales, could take a hit. Some of America''s best-known retailers may have a tough road ahead if the US enters a recession. After months of sky-high inflation, shoppers are making different decisions about what they buy and where they buy it. Some retailers, particularly discount chains, could benefit from these spending shifts and luxury retailers will mostly be insulated. But mid-range retailers are already feeling the pinch — and things may only get more challenging if the economy worsens. Of course, there are still mixed signals right now about how the economy is really doing. Inflation isn''t as high as it was in June, but it''s still high enough to make it harder for people to pay rent or fill up their gas tanks. Job openings are declining and many companies, particularly tech firms, are laying off employees in droves .