Sep. 12, 2011 at 11:41 AM ET
Big retailers and consumer-product companies are responding to what a wide swath of Americans have been struggling with for a while: the fact that the middle class is being squeezed out.
As more middle-class Americans struggle, marketers are pursuing an "hourglass theory," aiming for either the top or bottom of the income ladder, The Wall Street Journal reports.
Giant marketers like Procter & Gamble are increasingly developing products for lower-income shoppers, like its new Gain dish soap.
Meanwhile upscale retailers like Saks Inc. are seeing sales driven by wealthier shoppers, rather than those middle-class shoppers who might splurge on an entry-level item. The Journal says Citigroup has created an investment basket of 25 companies catering to either upper-income or lower-income consumers in what it calls the "Consumer Hourglass Theory."
The middle-class squeeze predated the recession, but the weak economy hasn’t helped. The Economic Policy Institute found in April that the wealth gap widened during the recession.
The top 20 percent of Americans by wealth controlled 87.2 percent of all wealth as of 2009, according to the EPI's analysis.
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