Low Income Families are Critical Consumers


             New Orleans       Many forget that low-income families are not just ALICE people, meaning Asset Limited Income Constrained Employed folks, but they are also an important and critical market for many companies.  Even while some conservative forces in the states try to cut back on crucial social services like Medicare and eligibility for food stamps, welfare, and other benefits, the crisis in their families also reverberates in multiple companies that drive the overall US economy.

McDonald’s in a recent earnings report for the first quarter of 2024 reported that their businesses are hurting in many places because lower income families have now depleted their savings and exhausted the pandemic family supports, so they are abandoning restaurants and going to grocery stores for cheaper products.  The company is responding with $4 meal packages to draw people back in, but ALICE families are likely better off in the grocery stores.

By grocery stores, I don’t mean dollar stores, because they are hurting too, since so much of their customer base consists of ALICE families.  Dollar Tree, which also owns Family Dollar, has made big news by announcing that they are closing 1000 stores to deal with customer income issues.  More importantly, than the closings, it is revamping its stores to add more food options and other products in the less than $5 range.  Reading between the lines, what they are acknowledging is the fact they are now too often the sad oasis in food deserts and need to address that fact more forthrightly if they are going to survive along with their customers.  Of course, they also want to make the money, for sure.  Dollar General earlier had touted its move to fresh food, making Little Rock stores and a proposed distribution warehouse there the centerpiece of its strategy.

Walmart is noticing the same thing and saying so, because lower income and ALICE families are also their bread and butter.  They have gotten a lot of recent publicity about their Manager’s Academy where they are trying to emphasize to their local store chieftains how important it is to take care of their staff, their customers, and even the community.  What a concept!

It’s hard not to talk about the elephant in the room.  These big, huge companies are having to make adjustments now, because for a brief window, thanks to Biden’s cash supports to families during the pandemic and the emergency increases in food stamps and Medicaid eligibility and support, these families were able to withstand inflation and often put aside some extra dollars for a change.  The end of these programs, including the additional child support, means less family income and more poverty, pure and simple.

Tight-fisted and conservative politicians at the federal and state level like to pretend that in cutting benefits in the social safety net that they are punishing malingerers.  Wrong!  They are punishing low- and moderate-income families – ALICE families – the working poor across the board.  Now that Wall Street and big companies are also feeling the pain, maybe they will finally listen to them, as big political donors, since they don’t mind ignoring all the families feeling the squeeze of their short-sighted and punitive policies at the grassroots.