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Retailers’ Xmas strategy reflects iinequality


Income inequality colors retailers’ expectations
The imposition of mandatory work on Thanksgiving for low-wage workers at Wal-Mart and other big-box retailers has attracted extensive media coverage, spotlighting how the holiday season is less than merry for many low-paid workers.

But another effect of America’s inequality is becoming visible in retailers’ plans for sales during the holiday season.

Widespread wage-cutting [discussed at “The War on Wages” at http://www.zcomm.org/the-war-on-wages-by-roger-bybee.html  and numerous other articles] and a drop in median household income –from $54,000 in 2008 to $51,017 at present, five years later–are shaping retailers’ expectations for the 2013 Christmas season. This is resulting in the stores planning  to offer steep discounts to attract low- and moderate-income consumers in order to stave off a disastrous holiday season.

From an article by Cotten Timberlake originally appearing in Bloomberg News, which can be found at http://www.jsonline.com/business/stores-alter-holiday-sales-to-prep-for-weak-shopping-season-b99146245z1-232605621.html:

The disparity between wealthy and lower-income shoppers is already showing up in chains' fourth-quarter profit estimates, with Tiffany & Co. projected to fare better than Walmart and Menomonee Falls [Wisconsin]-based Kohl's Corp. [emphasis added]

“Last month, consumer sentiment slipped to a nine-month low, colored in part by the U.S. government shutdown and debt-ceiling debate. Higher payroll taxes and uneven job growth also have undermined confidence. Shoppers have been spending less on such discretionary purchases as clothes this year as they purchased autos and home-related merchandise instead. [emphasis added]
"The consumer is more deal-driven than ever," Ken Perkins, president of researcher Retail Metrics LLC, wrote in a Nov. 14 note. "Discretionary dollars for holiday spending are limited for the large pool of lower- and moderate-income consumers due to lack of wage gains this year coupled with the increased payroll tax." [emphasis added]

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