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Middle class is our bread and butter
If you've been following the presidential election you know you've heard both sides talking incessantly about the middle class.
In this week's paper, Stephanie Nickell, one of our skilled research analysts, puts together a compelling story that augments a column I wrote back in September about the challenges middle-class Americans are facing.
My column focused on the fact that the middle class - historically a key consumer group for home furnishings - is shrinking, both in size and in the levels of income available to them.
A recent study by the Pew Research Center concluded that "the middle class is struggling to survive and shrinking before our eyes."
The report, which polled some 2,500 consumers who identified themselves as middle class, determined that the mean net worth of middle-class families tanked 28% to $93,150 in 2010, down from $129,582 in 2001.
It also found that as a direct result of dwindling income levels, 62% of the middle class said they have cut spending.
While this should be sobering news to all retailers, home furnishings retailers should pay special attention, particularly since our 2011 Consumer Buying Trends Survey found that 40% of furniture and bedding consumers have incomes of between $50,000 and $99,000.
It was not surprising to learn that another survey released last week from Pew Social and Demographic trends found that members of Generation X, those Americans aged 35 to 44, are now most concerned about financing their retirement. That is a stark turnaround from 2009, when that group said it was least worried about having the funds to retire.
I've heard the politicians go on and on about the trickle-down effect, but I don't think this is what they meant.
But can you blame the Gen X crew? A recent Census Bureau study found that those aged 35-44 saw the biggest percent decrease in median household net worth between 2005 and 2010.
Worried or not, however, sooner or later (let's hope sooner) they will need furniture. So the challenge - or opportunity - centers on the message you send their way to encourage them to buy from you.
I would love to hear from those of you who have figured it out. Send me an email at email@example.com