Major US Retailers Warn: Lower-Income Consumers Are In Trouble

President Biden and his top advisers have been adamant that the consumer is exceptionally strong this summer despite the economy slumping into a technical recession. Well, maybe in aggregate, the consumer appears healthy, but numerous retailers pointed out that less-affluent ones are tapped out.

Earlier this summer, we saw the first signs of consumer cracking as people maxed out their credit cards and depleted savings amid 16 months of tumbling real wages due to the highest inflation in forty years.

Companies from McDonald’s Corp. to Costco Wholesale Corporation to Burlington Stores, Inc. to Nordstrom, Inc. to Macy’s to Advance Auto Parts, Inc. to AT&T Inc. to even Dollar Tree, Inc. have all echoed a very alarming message that low-tier consumers are scaling back purchases as inflation bites.

In July, McDonald’s offered a grim warning about the consumer’s state: Customers traded down for less expensive menu items. Lower-tier customers ditched combo meals for value offerings. – READ MORE