Retail stocks' earnings season has started, and one theme investors will hear repeatedly is the state of the consumer. The Federal Reserve’s campaign to raise interest rates has widened the gap between low- and middle-income consumers and high-income consumers.
That gap is reflected in uneven consumer spending patterns. Persistent inflation continues to put strain on lower-income households. Higher-income households remain resilient; however, companies like Walmart Inc. (NYSE: WMT) have observed a trade-down effect with higher-income consumers choosing Walmart for groceries and essentials as they look for value.
