Trickle-Up Austerity

Michael Panzner
updated | Author's Website

In the good old days before the financial crisis struck, trickle-down prosperity was the rage. But in today’s new normal, as My Budget 360 reminds us in “United States of Dollar Stores,” it’s more a matter of what one might call ”trickle-up austerity.”

The fastest growing segment of dollar store customers are coming from those making $70,000 a year or more.  In fact, 1 out of 5 dollar store shoppers come from this group.  Keep in mind the median household income in the US is $50,000 and those that make $70,000 a year or more are in the top 35 percent of households.

The rise of the dollar store goes hand and hand with the loss of the middle class in America.  The largest customers at dollar stores are still those with lower incomes, households making $40,000 a year or less make up nearly half the customer base.  But when this pool continues to grow you have business growth and that is what we are seeing here.  The average per capita income in the US is $25,000 which doesn’t go far given the cost of healthcare, energy, and education.

It is also fascinating to see that 40 to 45 percent of dollar store items now come from big name brand companies.  This industry is now a multi-billion dollar industry.  I’ve driven around and see Subway and KFC for example now having marketing material showing “EBT accepted here” and dollar stores with a large and growing segment of their aisles made up of by food, are seeing a boon in this economy.  I mean think about it with 45,000,000+ Americans receiving food assistance this is a large customer base.  You also have many retirees who heavily rely only on Social Security stretching their declining buying power at these stores.  Even with low profit margins business can be good.  Not sure if we should be thrilled that dollar stores are one business segment that is booming in our modern day economy.

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