According to a recent story from Quartz, the so-called Retail Apocalypse is really only affecting mid-price retailers (RIP Toys ‘R’ US). For luxury and value brands, things are as good as they’ve ever been.
Citing a recent Deloitte report, the story posits that the term “retail apocalypse” is actually misidentifying the real issue affecting the industry: mid-priced retailers — like the middle class itself — have been casualties of the success at either end of the price-point bell curve.
“At the high and low ends, retail is thriving,” the story says, noting that Coach and Old Navy fall neatly into the “thriving” category. “It’s in the middle that it’s faltering. This split is playing out right along with the shrinking of the US middle class.”
As the rich get richer, and everyone else’s lack of discretionary income drives them to seek out the best deals possible, it’s “brands in the middle, which rely on a mix of price and promotions to drive sales of goods that aren’t exclusive or the cheapest on the market…[that] have watched their customers flee,” a process that Deloitte calls “the great retail bifurcation.”
And, as it stands now, it’s going to get even worse for those mid-priced outlets. “In the past year, the trends have only grown more pronounced,” the story said. “Sales at mid-priced retailers declined 2%. At premium and low-priced retailers, they grew 8% and 7%, respectively.”
And even though the story reports that “more stores are actually opening than closing,” it clarifies that the new stores are “all on the low and high ends. If you look at the middle only, the situation does look dire.”
You can read more about it at Quartz.
