Death of the Middle Class

What? There's no middle class? What is this, 1800's Europe? Don't leave yet if you think this is bogus. No, it's not that the middle class itself is just gone, it's the fact that it is shrinking (specifically the US but of course not limited to), leading to closures of department stores, and "large specific stores" like Toys R Us. The funny thing is that high-end stores and budget stores are seeing increasing revenue, 81% and 37% respectively (Deloitte). Middle-range stores saw a mere 2% increase in FIVE years. That's crazy.

Low and middle-income people are now shopping at discount stores and dollar stores, which is draining the number of customers from the "middle stores". The two most successful business sectors are now the luxury and budget stores. And it doesn't seem to be changing in the opposite direction because consumers are becoming more concerned about their finances as well as becoming more drawn to social issues. 

What I mean is that people want to show off, or want to buy some of the latest expensive good. They may prefer the premium product just because of social norms. Of course, it's misleading. Many middle=class people may want to seem rich. They'll buy one Coach bag, or buy one Mercedes. It is definitely a confounding factor.

It's interesting to see how society can shape people's opinions and is essentially forcing people, think of peer pressure, to buy stuff they normally wouldn't. Say you wanted to buy some Coach bag, and then you wanted to buy some glassware.  Well, because you wanted to show off to friends or even just to provide yourself with a little reward, you're going to go to Dollar Tree to buy some glass cups instead of at like Walmart or some other store. Name brands didn't matter too much before, but with the advent of technology and other media, people are becoming more sensitive to "special" goods and services.

We can dig even deeper and explore things like inflation or rising college costs that are forcing people to be more conscious spenders.