Thursday, December 16, 2010

Ho! Ho! Ho! Wealth gap becomes chasm at Christmas

Luxury retailers see strong demand as lower-income shoppers hunker down

With just a few days left in the holiday shopping season, reports from retailers suggesting  strong sales are prompting analysts and investors to declare that “the American consumer is back.”

Make that "some consumers." With unemployment stuck near 10 percent, home prices falling and foreclosures still rising, holiday shopping this year has brought into sharper focus the divide between upper- and lower-income American households.

“It’s very much a tale of two worlds,” said Bernstein Research retail analyst Colin McGranahan. “There’s a big dichotomy between the well-educated, upper-income consumers — what the employment trends looks like, what the wage trends looks like — and the lower-income, less well-educated consumer. It’s a very different picture.”

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