The American middle class, once the powerful engine of the economy, is shrinking. This “hollowing out” of the middle is not just an abstract economic theory. It is a reality that you can see for yourself in the aisles of your local grocery store. The ice cream aisle, in particular, is a perfect and very telling example of this economic shift. The products that are on offer are a clear sign that the “middle” of the market has all but disappeared.
The Two Extremes: Budget vs. Luxury
If you look at the ice cream section today, you will see two, and only two, dominant categories. On one side, you have the “budget” option. These are the large, half-gallon tubs of a “frozen dairy dessert” from a store brand or a company like Breyers. These are low-priced, low-quality, and volume-based products. On the other side, you have the “affordable luxury” option. These are the small, expensive pints of a super-premium brand like Ben & Jerry’s, Häagen-Dazs, or Jeni’s.
The Disappearance of the “Middle”
The product that is missing from this equation is the one that used to be the standard. This is the simple, half-gallon container of “real” ice cream made with milk, cream, and sugar, and sold at a reasonable, mid-range price. The classic Breyers, before it changed its formula, was the perfect example of this. This “middle” product has been squeezed out of the market from both ends.
The “Trade-Down” Effect
As the middle class has struggled with stagnant wages and high inflation, many families have been forced to “trade down.” They can no longer afford the mid-range, real ice cream. They have been forced to switch to the cheaper, lower-quality “frozen dairy dessert” to save money. This causes demand for the mid-range product to collapse.
The “Affordable Luxury” Splurge
At the same time, a different kind of consumer behavior has emerged. Even as people are cutting back on big-ticket items, like a new car or a vacation, they are still willing to “splurge” on a small, affordable luxury. They may not be able to afford a fancy dinner out. However, they can afford a $7 pint of Ben & Jerry’s. This has caused the demand for the high-end pint to explode.
The Barbell Economy
This is a classic example of what economists call a “barbell” economy. The market has become weighted at the two extremes. There is a large, low-price market and a smaller, high-price luxury market. The “middle” of the market has completely vanished. The ice cream aisle is a perfect and very delicious visualization of this economic reality. It is a sign of a country where the middle class is no longer the target audience.
Do you agree with this trend? Have you noticed this “barbell” effect in any other grocery store aisles? Let us know your thoughts!
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The post The Grocery Aisle That Shows Exactly How the Middle Class Disappeared appeared first on Grocery Coupon Guide.
