Challenges among mid-tier brands: Consumer bifurcation has hollowed out the middle. After experiencing wealth-accumulation growth over the past five years, the middle class is seeing it dwindle more quickly than other income brackets, according to Realtime Inequality.
- At the same time, wealthy consumers are fueling a boom in the ultra-luxury market. High-end fashion houses are spending freely on marketing—and some brands are being resold at a premium. We expect luxury retail sales will grow 6.7% this year.
- Brands and retailers that try to be everything to everyone will suffer. While ultra-luxury brands will remain relatively unscathed, aspirational luxury retailers will be hardest hit if they can’t reposition themselves. The most at risk retailers in 2023? Mid-tier brands that aren’t financially secure—like Bed Bath & Beyond.
Go further: Dive deeper into our predictions for this year in our report Retail Trends to Watch for 2023.
This article originally appeared in Insider Intelligence's Retail & Ecommerce Briefing—a daily recap of top stories reshaping the retail industry. Subscribe to have more hard-hitting takeaways delivered to your inbox daily.