NEW YORK - Walmart, Burger King and Kraft Foods joined "a parade" of retailers, restaurants and CPGs that are feeling the economic effects of the federal payroll tax.

The Wall Street Journal writes that the expiration of the payroll tax cuts at the beginning of 2013, which knocked 2% off consumers' take-home pay, is having an impact on retail spending and will "shift $110 billion overall out of consumers' hands," according to Citigroup.

After realizing less-than-stellar sales in January, and potentially the same for February, Walmart is responding by stocking shelves with cheaper products, smaller packaging sizes for items such as diapers, toilet paper and snack foods, writes the news source. Burger King is cutting its Whopper Jr. sandwich to $1.29 from about $2, and promoting value menu items instead of higher-ticket items such as salads and smoothies. Both Kraft and Tyson Foods are launching lower-priced foods to help out restaurants and grocers.

Walmart has indicated that its Q1 U.S. sales will be are flat compared to a year ago. In terms of the overall effect on the economy, weak sales from leading retailers such as Walmart are a cause of concern, according to business analysts ?" "even Federal Reserve officials have frequently cited what they hear about the economy from Walmart as an early warning of trends to come," writes the Washington Post.

Meanwhile, new findings by the National Retail Federation suggest that less take-home pay is causing consumers to cut back on their spending. According to NRF??s 2013 Tax Returns Survey, 73.3% of those polled say their spending plans are taking a hit. Specifically, 45.7% say they will spend less overall, and 35.6% will watch for sales more often. Also, 33.5% will reduce how much they dine out and 24.5% will spend less on "little luxuries," such as trips to coffee shops, manicures and high-end cosmetic items.