Nobody's buying mid-tier retail brands anymore: report
Our habits may never really improve, but the recession has at least altered some consumer patterns for the better.
Before, when we kept buying, as the The Rent Is Too Damn High Guy might say, too damn much stuff we couldn’t afford, we got dinged. No matter who’ll take responsibility, the housing market collapsed, banks crumbled and credit card debt spiralled out of control because of sweeping financial irresponsibility.
So now, having been spurned, the smart consumer shops discount brands for fear of another downturn. Of course, the rest go right back to Gucci, Louis Vuitton and the like, which has unsurprisingly created a new retail problem: middle-tier brands no longer have any shoppers to call their own.
Yes, in a development we should’ve all seen coming, CNN Money reports mid-price stores like the Gaps of the world are having a heck of a time attracting consumers after the recession.
According to the latest numbers, Gap and Banana Republic, among others, have reported same-store sales below where they stood a year earlier. By contrast, discount retailers TJ Maxx and Target are thriving in the U.S., where rededicated shoppers have brought total retail sales up six per cent from last year.
In a sign of total economic doom – or, I guess there’s a chance, total economic health – luxury brands are back raking it in. By figures from American Express, which tracks the spending habits of its 90 million cardholders, so-called “luxury” fashion spending is up 35 per cent over the past year, far exceeding the “mainstream” fashion spending increase (just eight per cent overall).
Whether this means we haven’t learned a thing, have never been in better financial standing or are headed right back down the same damned path remains to be seen. But it’s also started something analysts call the “Barbell Effect.”
We buy high-end. We buy low-end. We buy nothing in between.
Have you noticed yourself ignoring the middle-tier retail brands since the recession eased?
By Jason Buckland, MSN Money
Posted by: Steven | Mar 16, 2022 11:58:01 AM
It's a good thing all the mid-tier product manufacturers shipped their production facilities overseas years ago so they can weather the lack of domestic middle class consumers now.
That's foresight !
Posted by: Quarmby | Mar 16, 2022 12:29:46 PM
Just another indication that the middle class is being systematically eliminated. I'm actually looking forward to the coming collapse and subsequent rebuilding of the fiat currency system, as I believe things are so "inequitable, unsustainable and unfair", that a total restructuring is not only due and unavoidale, but neccessary.
Posted by: Gulp | Mar 16, 2022 4:04:19 PM
Yes, the middle class is dying. And this story just reinforces it. Yes it is sad but no it cannot be stopped. Sadly it will die. And while most people in the western world have come accustomed to a middle class, historically a middle class is not natural. Throughout most of history there have been 2 main classes--rich and poor. Each country had a rich class and a poor class. But that changed in the 20th Century. Now we had rich countries (capitalist and free trade) and poor countries (socialist and communist). This meant that there was so much money concentrated in capitalist countries that even the not so well educated could get good standards of living--they became the middle class.
But that changed 20 years ago. Russia, China and India all embraced capitalism and free trade. We lost our advantage over them. Now they have the same capitalism and free trade we do and they are succeeding and competing for our middle-class jobs. We in the western world had a few good generations of a middle class but it will return to the historically normal state. Trying to prevent the decline of the middle class is like trying to prevent the onset of winter. The middle class is doomed--it's sad but inevitable. This story just makes it more obvious.
Posted by: John | Mar 18, 2022 12:07:13 PM
Attention Gulp and anyone else who says that capilatism is a good thing for anyone, YOUR AN IDIOT!!!!
Communism is not the correct solution BUT capilatism has done far more damage then communism ever did.
All capilatism has ever done is make 10% of the population richer while 90% cannot even afford food and shelter every month.
What good does raising minimum wage to the point where people can afford to live on it if the cost of living goes up as well which just takes more money from them and leaves them with less.
I could survive happily on $1000 a month if my cost of living was $300 for food and rent.
If it comes down to a choice between 10% of the population lives in luxury while 90% starve OR
Taking from everyone who has extra to make certain everyone has food, shelter and good health I know what choice I am making.
Posted by: Candice | Mar 18, 2022 1:08:44 PM
i think retail speaking, people have just realized that the quality of the middle tier is not worth the price tag the middle tier retailers put on it. everything coming from china now means that there are alot of similarities in the quality or lack there of and consumers now know that much of the product offerings are the same quality, some retailers are just trying to pass off the cheap stuff as their regular but people aren't buying it ......
Posted by: Gulp | Mar 19, 2022 1:15:16 AM
John, well I'm not going to try to dispute your assertion that I am an idiot...I'll defer to your expertise and obvious experience in the field. But as for your other assertion regarding capitalism I'll say this...
Capitalism is not perfect...hardly anyone thinks so.And let's face it...poverty existed long before there was capitalism. In fact if you look at pretty much all other economic systems you'll see that capitalism actually produces the least poverty. Wasn't that the great economic lesson of the 20th century? That capitalism and free markets are the way to go. Why do you think so many poor countries (India and China for example) have rushed to capitalism and hey guess what? They like it because it improves their lives. Capitalism and free markets certainly are not perfect but I've yet to see a better system. In fact, since this article and the comments hint at the demise of the "middle class" I think it's worth pointing out that we've only really ever had a sizeable middle class in capitalist countries. But if you can think of a better system to reduce poverty then you are a smarter man than I...but I think you already knew that didn't you?
Posted by: Gulp | Mar 19, 2022 1:41:58 AM
Plus John I don't know where you get your statistics from but I'm assuming it's an area immediately behind you...below your back but above your hamstring. Because in my experience 90% of the people are not starving. I for one do not belong to the 10% of the population that you say is rich and I know of several people who have not starved. My nieghbour is an electrician and he did not starve. My mother was a waitress and she did not starve. My dad was a welder...he didn't starve either. And neither did their 3 kids. But I do remember being hungry as a kid standing in line to get a hamburger when we vacationed in Disneyland (we went there 3 times). But I'm sure the kids in non-capitalist countries were much better off...they never had to stand in line at Disneyland did they?
Posted by: Quarmby | Mar 20, 2022 8:16:29 AM
@John & Gulp....you both seem like bright individuals, both have some good points and both are too angry to debate and collaborate rather than argue over some seemingly surmountable differences on how to arrive at more or less the same place. Exactly what the politicians count on. Divide and conquer has been their war cry since Trudeau figured it out. This is the problem (especially in Canada) as, if we ever got past our petty differences and name calling and started thinking (and voting) as one group of pissed off Canadians....none of the present band of theives would be "at the trough". The entire system needs to be redesigned, not merely tweaked. Both of you obviously care passionately about Canada and might consider putting your combined intelligence and ideas toward a positive and viable solution. Remember, this is OUR country...not a private bank for the politicos and their friends...time we got together and let them know that we are fed up and going to claim & protect what is OURS..NOT theirs....find some middle ground and you might find that you are not that far apart on the desired result(s).
Posted by: Northern Ontario | Mar 20, 2022 11:13:44 AM
@ Gulp. You are so correct. In Democracies, those less fortunate like to exaggerate numbers to make their feeble points. I have worked very hard to be considered in the top 10%. To be honest, I didn't make sacrifices after my post-secondary schooling to be part of the elite 10%. In my 20's, I made decisions like move away from home, read a lot about finances, asked questions from those in the know, worked from the bottom-up and never complained even tough times were tough at the beginning. I realized then that in order to not be in the so-called 90%, I needed to work harder than the other 9 employees. Not an exact science but you get the drift. While the majority of my friends are in the 90% bracket (very happy by the way), the other 10% of my friends did the same sacrifices as I did. The incentive always needs to be there for Capitalism to work. The notion of scrapping the Elite10% in order to ensure that all society should be equals is nonsense. There needs to be different classes to ensure those who work harder and are brighter are compensated properly. Of course there are exceptions to the rule. These high $ million dollar payouts for CEO's or Athletes is not necessary. Sure they should get a much higher salary but not $5-25 million per year. Lastly, our society should be taking care of those dealt with a bad hand. Those wheelchair bound, blind, illness like MS..... should not have to live on a paltry government salary of $1000 per month. We need a lot more compassion than that.
Posted by: Chazztbay | Mar 22, 2022 10:22:06 AM
John, if you're going to post complaining about costs you might want to try at least being realistic. Most people could survive on $1000 a month if food and rent was $300, but that isn't even reasonable in some relatively poor countries. Who would build residential buildings if all they got was $300 a month ? Nobody, because it wouldn't even begin to cover costs.
Globalization, coupled with overpopulation got us to the point we are now at. I am not against globalization as I agree countries should focus on comparative advantage. Overpopulation is the main problem. We have over 7 billion people on a planet that many scientists, health care people and others long ago realized should not have more than about 4 or 5 billion TOPS.
At this point our middle class will disappear because China and India and Brazil and Russia have a middle class now too. But guess what ? While we are pulling that middle class up, they are dragging ours down and they are much bigger than we are. We are going to fall further than they will rise. It's simple math.
There are not enough resources left on earth to give all those people what our middle class had even if we wanted to, so as a result more and more of our middle class will be priced out of the market as well. Not enough wood to build all the houses, not enough land to feed all the people, not enough steel, aluminum ect to build all the cars.
Our middle class on a global scale was, at one point in fact in the richest 5-10% of the global economy. Now they are just heading towards the REAL middle class (globally). The last few decades with what you people refer to as a Middle Class were in fact not the reality, nor was it sustainable.
The economy works like any other organizational structure. A company has 1 or a few people at the top. So does a government. So does a class system. In the 90's companies cut middle managers and governments cut bureacrats. Now the middle class is going to be cut because it is simply not a sustainable system. Not if it is ever increasing in size (population) while inputs (jobs, food, resources) grow more slowly, or in fact shrink.
Posted by: binder dundat | Mar 23, 2021 9:20:49 AM
John - I'm in agreement with you for the most part, the one thing about communism is that its a double edged sword, in theory it works great, it creates an equal society where everyone has a job, a place to live, food to eat, health care and so on. But it has been proven of course that in reality it fails i think mostly due to the people running it. As for capitalism, its a fight to the death in my opinion, the strong will grow and be rich and the weak will just barely make it day in and day out.