Wealthy customers are keeping the economy alive while everyone else pulls back. As prices stay high and debt grows, lower-income shoppers have stopped spending. Companies aren’t waiting around. They are chasing bigger wallets.
Lower-income households, earning $50,000 a year or less, aren’t growing their spending anymore. Some are spending even less. Meanwhile, higher-income households, those making $100,000 or more, are still shopping. In fact, they have increased their spending by nearly 2% since last year. For brands, the message is clear: follow the money.
Why Brands Are Shifting to Wealthy Customers
Credit card data tells the same story. Premium cardholders, like those with American Express Platinum or Chase Sapphire, are spending 5 to 6% more than last year. Store card users, like Synchrony or department store cards, are cutting back by 4%.
Three decades ago, they made up just 36%. This group benefits from the stock market, rising home values, and low mortgage rates they locked in before interest rates spiked.
Retailers aren’t just watching this trend. They are building around it. Walmart, once known for cheap goods, is now stocking high-end brands like Apple and Bose. They have remodeled stores to look more premium. And it is working. They are pulling in more shoppers from the higher-income crowd.
Fast food is feeling the shift, too. McDonald’s says visits from low-income diners are down about 10%. On the other hand, high-income customers are still showing up and spending more. To keep both sides happy, McDonald’s brought back cheap value items and launched new premium items at the same time.
Travel is All About Luxury Now
In travel, airlines are racing to upgrade. Business-class suites are the new battleground. Why? Because the people buying them are still flying. Economy seats? Not so much. Companies like Booking Holdings, which owns Booking.com and Priceline, say wealthy customers are spending more on 5-star hotels and international trips.
Uber is doing something similar. They are pushing both ends of the spectrum. On one side, they offer budget rides. On the other, they promote Comfort and Black services, which appeal to higher-income riders. It is a barbell strategy that tries to catch both the budget-conscious and the big spenders.
Meanwhile, lower-income families are getting squeezed. Inflation hits them hardest. Groceries, rent, and gas take up more of their paychecks, leaving little left for other expenses.
Similarly, debt is also piling up. Credit card balances are high, and more people are falling behind on payments. Their pandemic savings are long gone. On the flip side, high earners still have breathing room. Their wages are growing faster. That means more money for dining out, traveling, and luxury goods.
The Risk of Focusing Too Much on the Rich
But there is a risk here. If companies rely too much on wealthy customers, they are exposed if the economy shifts. What happens if the stock market drops or a recession hits? That could spook even the big spenders and bring growth to a halt.
Some brands are trying to balance both sides. Crocs is a good example. They are still running value deals to keep lower-income customers around, while also releasing limited-edition collabs that appeal to richer buyers. Chipotle is doing something similar by offering promotions while also expanding its digital-only premium menu.
