Living Paycheck to Paycheck

Luis: Food expenditure in the U.S. is but a fraction (10%) of total disposable income. Over time, affluent consumers have "traded up" to foodstuffs that improve lifestyle and fulfill all manner of social and emotional needs. This trend is not expected to vanish.

However, there are signs that a growing segment of Americans are under economic strain and trading down at a fast rate. Therefore, this holiday season one may expect Wal-Mart and other discounters to intensify already relentless price pressure over produce suppliers.

More retailer "letter to dear supplier" in the horizon?

Living Paycheck to Paycheck Gets Harder
By Anne D'Innocenzio

NEW YORK Oct 19, 2007 (AP)

Excerpt:
"The calculus of living paycheck to paycheck in America is getting harder. What used to last four days might last half that long now. Pay the gas bill, but skip breakfast. Eat less for lunch so the kids can have a healthy dinner.

Across the nation, Americans are increasingly unable to stretch their dollars to the next payday as they juggle higher rent, food and energy bills. It's starting to affect middle-income working families as well as the poor, and has reached the point of affecting day-to-day calculations of merchants like Wal-Mart Stores Inc., 7-Eleven Inc. and Family Dollar Stores Inc.

Food pantries, which distribute foodstuffs to the needy, are reporting severe shortages and reduced government funding at the very time that they are seeing a surge of new people seeking their help.

While economists debate whether the country is headed for a recession, some say the financial stress is already the worst since the last downturn at the start of this decade."

Luis: Or as some economists say: Why don’t prices rise during periods of peak demand?