Store sales point to the concentration of wealth
Title: Wal-Mart vs. Neiman Marcus - In the war between the "Two Americas," the rich folks are winning.
Date: July 12, 2004
This is an incredibly interesting article that uses standard statistics normally associated with stock analysts to point out the growing concentration of wealth.
Here is the gist of the article. If you look at "discount stores" like Wal-Mart and Target, sales are off. According to the article: "At Wal-Mart, U.S. same-store sales rose just 2.2 percent in June. The discounter-friendly Target chain likewise reported same-store sales growth of 2.2 percent." Wal-Mart and Target are stores frequented by the American middle class.
Now compare that with sales in stores frequented by wealthier Americans. The article states: "The more luxe the chain, the more same-store sales rose in June: Nordstrom, up 5.7 percent; Saks, up 8.5 percent; extreme consumption emporium Neiman Marcus, up 13 percent."
The article points out similar findings in consumer confidence numbers:
- The Conference Board shows the same split. In its most recent month, May, the index for over-$50,000 demographic was 112.1, the highest it's been since June 2002. But for those making under $50,000, confidence not only remains below its levels of July 2002, it has been falling in 2004.... It's axiomatic that rich people are likely to be more optimistic and confident than those with less money, so the raw differentials aren't that surprising. But in the past few years, the readings for all income groups have generally moved in the same direction. If the economy were undergoing a broad-based expansion, if a rising tide were lifting all boats equally, you might expect that trend to continue. But the views of the rich and poor are moving in opposite directions. The split results—the growing pessimism of the poor and the growing optimism of the rich—suggest the economy's improvement isn't helping everyone.