Major retailers report diverging consumer trends, with affluent shoppers driving spending while lower-income households pull back amid inflation.
Major US retailers including Walmart, Target, Home Depot, and Lowe’s highlighted a growing divide in consumer behavior during recent earnings reports. Affluent households continue to spend, buoyed by stock market gains, while lower- and middle-income consumers face pressure from inflation and higher gas prices near $4 per gallon.
Retail sales rose 0.5% in April, with general merchandise spending steady despite record-low consumer sentiment. Bank of America data showed a 4.8% year-over-year increase in card spending per household, though higher-income shoppers outpaced lower-income groups, excluding gas purchases.
The trend reflects a K-shaped economy, where economic recovery and spending patterns diverge sharply across income levels. Retailers are responding with dual strategies, offering discounts to budget-conscious shoppers while expanding premium offerings for wealthier customers.