'Inferior Goods' Prove Superior in Downturn
Economists call them “inferior goods” and they are fast becoming a hot commodity.
Inferior goods are simply the kinds of low-priced alternatives that people turn to during hard economic times. And not only the poor.
“We’re seeing more Mercedes and BMWs in Wal-Mart parking lots, and Wal-Mart shoppers are going to dollar stores,” said John Bishop, a consultant at GfK Roper, a research outfit, as quoted in Investor’s Business Daily.
Sales of Spam and Wonder Bread are spiking, he said. The dollar menu at McDonald’s is growing more popular. Wal-Mart is up; Target is down.
For most companies, this phenomenon will last only as long as the recession, or downturn, or whatever it is we’re calling it. The restaurant chain Chipotle may be hurting now, but there’s no reason to think its traffic won’t return when times are good again.
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