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