If you are a car audio dealer thinking about renovating the shop, read on.
Retailers are moving either upscale or downscale because the middle class has been shrinking.
The middle class has dropped to a 45 percent of the share of households, down from 55 percent in the 1970s, and this class has not gotten a raise since 1999, said The New York Times.
The average household is paying about $10,000 more in expenses due to the rise in health care and childcare costs. And with inflation, those stagnant salaries are actually down 9 percent from 1999.
The slump in the middle class has caused fast food chains, whose sales are flat, to seek new means of growth. By contrast, sales are growing at fine dining restaurants, which are up 3 percent.
“As a retailer or restaurant chain, if you’re not at the really high level or the low level, that’s a tough place to be…You don’t want to be stuck in the middle,” John Maxwell at PricewaterhouseCoopers, told the NY Times.
He is advising his clients to go upscale or downscale and car audio retailers may want to do the same.
High end gambling casinos like Wynn in Las Vegas are prospering but casinos that cater to the less affluent in Atlantic City, CT and NY are on the downswing. according to Goldman Sachs.
It’s the same in automobiles. Luxury car sales are booming so car makers including Audi, Cadillac and Mercedes-Benz are introducing all new high end models.
Is it time for your shop to go upscale?
Photo: MCOR Automotive moved to a better location in Tampa, FL in 2013