The Thematic Opportunities of the New Retail Landscape
In this article we see some familiar data that we’ve been posting often here at Tematica Research and on our Cocktail Investing Podcast :
Between 2007 and 2016, high-income consumers (the 20% earning more than $100,000) experienced 4% growth of their disposable income, to 63% of total income. The disposable income of middle-income consumers (the 40% earning $50,000 to $100,000) remained flat, at 39%. Meanwhile, low-income consumers (the 40% earning less than $50,000) saw their disposable income dip 16% during that timeframe, putting their discretionary share of wallet at -23%. This widening disparity in US incomes is having an effect on retail. Deloitte looked at revenue growth among different types of retailers over the past five years: “price-based” retailers, those that compete solely on price like discount and dollar stores; “premier” retailers, which offer exclusive products and experiences; and “balanced “retailers, those that focus on price and promotions and sell widely available merchandise. It found the higher-end stores experienced revenue growth of 81%, while revenues for discount stores grew 37%. By comparison, revenues at midrange stores grew only 2%.
Read Full Article: Retailers Feel the Effects of Growing Income Disparity | eMarketer Retail
The exposed opportunity coming out of the realities data hits upon two of our key themes: The Cash-Strapped Consumer and the Affordable Luxuries investment themes. They are two themes that have been providing strong thematic tailwinds behind several key players on our Tematica Select List with strong returns.
