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Mid-priced retail to suffer in hourglass economy

Shoppers and pedestrians cross 34th Street outside of Macy's Herald Square department store in New York City.

Jeremy Hobson: Family Dollar reports earnings later today, and the outlook is pretty good. The company is benefiting from a growing number of Americans who are in the mood for discounts. Interestingly, at the other end of the retail spectrum, high-end shops are also doing okay.

As Marketplace's Adriene Hill reports, you can see the trends in plans for holiday hiring.


Adriene Hill: The middle class is getting squeezed, which means mid-priced retail is getting squeezed right along with it.

David Szymanski is dean of the University of Cincinnati's Carl H. Lindner College of Business.

David Szymanski: You have a very cautious, very concerned consumer, who's really looking to the bottom end of retailing in terms of purchasing products.

And holiday retail jobs will follow that demand.

John Challenger: Probably the strongest area are the big discounters.

John Challenger heads outplacement firm Challenger, Gray and Christmas. He thinks holiday shopping -- and hiring -- will have an hourglass shape. There will be spending and jobs at the low end. Luxury retail, too. He expects high-end stores will add some holiday staffers, as big-money spenders aren't being hit as hard by this economic downturn. But:

Challenger: Middle-end retailers, department stores, are the ones who seem to be taking it on the chin.

It seems going into the economic downturn's fourth holiday season, there may be another lump of coal for the middle.

I'm Adriene Hill for Marketplace.

About the author

Adriene Hill is a senior multimedia reporter for the Marketplace sustainability desk, with a focus on consumer issues and the individual relationship to sustainability and the environment.
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Being in the middle of any product category is always very risky. It is safer to be the price leader or the value/quality leader.

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