Looking back on the latest earnings season for retail stocks, an unusual K-shaped pattern emerges: lower-income households appear to be struggling, with some value stores having a difficult time reconciling their low prices against increasingly costly inventory. At the same time, though, a handful of specialized stores, including homeowner and contractor supply chains, have had unexpected strong quarters in numerous respects.
This data helps to support the growing narrative that different groups of consumers are experiencing the economy in vastly different ways, with those with more disposable cash tending to spend freely and those without being forced to tighten belts to even more extreme degrees.
