“Massive unemployment and declining wages are squeezing people out of the middle class,” said Kristin Bentz, executive director at private equity firm PMG Venture Group. “These people can’t even afford Wal-Mart now and are trading down to dollar stores.”
“The management teams of these companies have taken their eyes off the ball–they haven’t followed their consumers and how they’ve traded down,” said Bentz, adding that consumers are spending less on discretionary items and aren’t willing to pay for brands and labels. Instead, they are turning to lower cost fast fashion retailers like Forever 21, H&M, and Uniqlo.
See also related Walmart: ‘Going to a very dark place’.