Monday, August 15, 2011

Can’t afford the dollar store

More in the way of falling out of the middle class, although some of this might be getting awfully close to falling off the edge of the cliff.
Ann Zimmerman, Wall Street Journal, 11 July 2011 (I get the print addition but somehow missed it: hat tip: NC).
All three retailers cited transportation costs due to rising diesel-fuel prices as a major reason for their earnings shortfalls. But the chains also said their price-sensitive customers, pummeled by high unemployment, stagnant wages and soaring gasoline prices, are buying more food and other basics like cleaning products, which have relatively low profit margins, and fewer higher-margin discretionary products, such as apparel and home decorative items.
Shoppers have become less likely to splurge, for example, even on a $5 die-cast Transformer toy or 2-for-1 children's bathing suits at $7.
It notes that Dollar Tree, the most successful chain within the “dollar-store” niche, has half of its new customers coming from the households with a family income over $70,000.

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