The United States is witnessing a deepening divide in holiday spending trends, driven by rising prices and income disparities. According to The Wall Street Journal, households earning over $100,000 annually are expected to boost their holiday spending, while lower-income Americans are tightening their budgets due to increased costs for essentials like groceries and childcare.
Chris Peterson, CEO of Newell Brands, which manufactures popular products like Sharpie pens and Graco strollers, highlighted the market bifurcation: \"We started to notice this trend where there was a real bifurcation in the market between the $50,000-and-below consumer and the $100,000-and-above consumer.\"
In 2023, the average annual income for an individual in the U.S. was $65,470, with the median wage at $48,060, according to the U.S. Bureau of Labor Statistics. This income gap is influencing consumer behavior significantly.
Newell Brands is responding by focusing more on premium products. There's a noticeable uptick in demand for high-end items like blenders priced at $100 or more, while interest in entry-level options under $20 is waning. As a result, the company is scaling back improvements on its cheapest products to enhance its high-end offerings for consumers willing to spend more.
Overall, U.S. consumers increased their spending by 3.8% between November 1 and December 24 compared to the same period last year, as reported by Mastercard SpendingPulse. However, these numbers exclude auto sales and do not account for the critical post-Christmas shopping period, which is vital for retailers.
According to The Wall Street Journal, households earning over $100,000 annually are expected to boost their holiday spending, while lower-income Americans are tightening their budgets due to increased costs for essentials like groceries and childcare.
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