The Intelligence from The Economist Suck in the middle: the hole in America’s consumer base
May 12, 2023
Tom Lee Devlin, a global business correspondent, analyzes the decline of middle-of-the-road American brands amid post-pandemic consumer behavior shifts. Tom Wainwright, Tech and Media editor, discusses how AI is setting to revolutionize journalism, enhancing news delivery while raising concerns about job security. Fiametta Rocco reflects on historian Ranajit Guha's impact, highlighting the importance of viewing history through the lens of marginalized voices, including a poignant tale from 19th-century Bengal.
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Squeezed Middle
- Middle-class American shoppers face financial pressure from inflation and a slowing job market.
- This has led them to shop at more budget-friendly stores, creating a slump for mid-range brands.
Retail Winners and Losers
- Discount stores like Burlington and Walmart are performing better than mid-range stores like Macy's.
- This is because middle-class consumers are trading down due to financial pressures.
Luxury Market Resilience
- High-end consumers are not trading down, and luxury retailers like LVMH and Hermes continue to thrive.
- This is due to a wealth effect from rising asset prices and the lower impact of inflation on higher earners.
