Retail earnings show a divergence in consumer behavior: middle-income shoppers remain resilient while low-income shoppers are feeling increased economic stress due to inflation and employment challenges.
Middle-income consumers are still spending but are increasingly value-seeking; sales at discount retailers like Nordstrom Rack reflect a shift towards more affordable options.
Dollar General's 32% stock drop signals the economic strain felt by its lower-income customer base, which has worsened over the past six months as reported in their latest earnings.
The disparities between consumer spending behaviors can be traced back to the pandemic's initial effects, where various financial backgrounds saw increased savings due to stimulus measures.
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