The Protected class’s increasing separation from mainstream society is a trend that we increasingly see reflected in retailing. Stores that cater to either the top or bottom extremes – luxury retailers and dollar stores – are doing well. Those that cater to the middle are struggling.
Now that trend is reaching the grocery segment. . .
…we will probably lose one more of the common experiences that keep society stable and help us value each other’s humanity. The Protected-Unprotected divide will widen even further, and people will cross it less frequently.
I have tried to imagine scenarios where this divergence ends well. I haven’t come up with any.
This sounds very Cowen-esque: average is over, and this is worrisome
I just don’t understand the problem with this. Poor people need cheaper groceries and healthcare, so if that is a result of bifurcation then there is a benefit. We already don’t live or work together. What is left, really? And are there really all these benefits?
1. In my experience, market segmentation by class / SES group for groceries has been around for a long time. Where I grew up, I remember a smaller grocery store closing down to give way to two bigger supermarkets, one of which was the “fancy” one with somewhat higher prices and more selection of higher end foods and friendlier service, and the “basic” one which was low rent and low variety, and which has a larger share of low income immigrants and welfare cases for customers. I particularly remember the introduction of products in the fresh bakery section of the fancy mart, which were completely unprecedented for a normal grocery store in my area until that point, “Bagels!? Multiple kinds of bagels?! Croissants?! Baguettes!? Wow!” By the time Whole Foods came around, there were already several distinct tiers of supermarket, including bare-bones “Food n’ stuff”s and Walmart at the low end, Target and some familiar big name brands above, yet another class of fancy groceries above those (some new Safeways and Giants), and then the Whole Foods class (including the fancier Wegman’s and Harris Teeters.) Indeed, some of the newer Whole Foods locations seem even fancier still.
The SWPLs always need some way to signal that their fashionable food preferences are distinct and superior to those of less hip and affluent classes, and they are willing to pay the premium prices necessary to maintain that separation. I do most of my shopping at Costco, which has also noticeably increased in higher-end fanciness over the last decade, probably in part to distinguish itself from the other, lower rent wholesale clubs.
2. The apparently sustainable existence of multiple tiers in grocery stores and other markets may give us an indication of whether the middle-caterers will be dying or not. I remember a similar argument being made against Starbucks when it was struggling with a declining stock price from 2006-2009, after the reforms implemented after Schultz’s return (after he left in 2000, a kind of Jobs and Apple story) started to kick in. The “argument” went that Starbucks had become a victim of its own success. By successfully creating a huge US market for gourmet coffee drinks, competitors would gradually try to steal their customers, and so they were susceptible to a “stretch play”. Starbucks was stuck at a certain value point (quality vs. price), and an association with a certain middle class mass market. But customers who valued price over quality would flock to lower-priced producers like “McCafe”. Starbucks could not compete with McDonalds on the convenience or lowest price battlefields. Meanwhile, customers who favored quality and SWPL signalling over price would want to leave “mainstream” Starbucks behind and head to hipper, more exclusive coffee shops serving a higher grade of espresso drinks.
Well, it didn’t work out that way. Starbucks has roared back and is now worth over ten times more than it was at the bottom, and 3.5 times it’s previous peak. These anecdotes lead me to believe mass-market middle tiers are sustainable so long as they can maintain the necessary separation from the lower end of the market.
Are we sure the bourgeois instincts are so gauche? I have the equivalent of face blindness for status competition, as in I can see its features but am neither instinctively able to recognize it or compelled to subconsciously feel it. I hear a lot about Dunking Donuts coffee and that strikes me as something other than a positional good. Do the poor even drink coffee?
Dunkin’ Donuts coffee is the real deal.
Status-conscious social conformity (well, mostly subconscious) is the biologically-determined rule in human affairs. There are probably a few brain modules specifically dedicated to this function. It’s what enables easy and automatic cultural transmission and is “the secret to our success” in Henrich’s sense. But, like any biological rule, there are plenty of exceptions to typical neurological propensities due to genetic and environmental variance.
Some especially talented people are obviously firing on all cylinders with these modules, and we notice their keen social savvy, skills at influence, and effortless charisma (or sprezzatura). But there are plenty of people at the other end, who have less than optimal activity in one or more of these modules. So, like Tolstoy said about families, socially-talented people tend to be all alike, as a noticeably distinct “type”, while less socially talented folks are deficient in these qualities in a variety of ways.
And there is also the matter of degree. Someone with extreme cognitive talents in non-social skills can learn to use those abilities to compensate for minor disabilities with their social instincts, somewhat like how some boxers can learn to rely more on speed in their fighting strategy to compensate for lack of maximum hitting power.
And if you are hanging out anywhere on the contrarian or heterodox internet that tends to stray consistently from the high-status mainstream orthodoxy, then you are guaranteed to find a higher concentration of these types who are less sensitive to the conformity pressure. I’ve seen many, many commenters make statements similar to yours regarding their low level of sensitivity. Some of this is bragging, but much of it is real.
The good news is that the best of these types will still be credentialed, accomplished and successful individuals far above the status of dilettante, who can maintains the highest standards of logical rigor, and who can hold their own in any expert-level debate, while also being able to use their “natural immunity” from conformity pressure both to innovate creatively in a new direction, or to notice when the mainstream is engaging in group-think derived error.
The bad news is that in any open-entry environment without some kind of reliably effective filter mechanism, these contrarians are definitely going to be vastly outnumbered by a huge number of cranks, misfits, oddballs, eccentrics, freaks, weirdos, losers, and underachievers, who are magnetically attracted to fringe ideas precisely because they are not able to succeed in mainstream venues. Like flies, they are attracted to both honey and feces, noticing that these are both out of the ordinary, but without being able to tell the difference in quality.
And these folks will chase away your stars in a variety of ways. They’ll raise the noise and heat far above the signal and light, respectively, and they will pose severe guilt-by-association problems.
Unfortunately, the overall effect is to shield the mainstream from criticism of the sort that would diminish the apparently rock-solid “social proof” of erroneous mainstream ideas.
I think I understand, I just don’t quite buy it. It seems problematic to argue that social proof is both secret to success as well as a major contributor to cognitive bias.
For example, one of the reasons I actually like public school is that we don’t get into the arms race, hedonic treadmill, people standing up to see the parade, rat race etc., involved in the zero sum positional good game.
That’s false as a simple matter of fact. Look at how much resources is spent by MC/UMC people on buying houses in “good school districts”. Nominally public schools become effectively zero-sum through the medium of the real-estate market.
Handle should have a guest column here at least twice a month.
In particular I was thinking of this paragraph or some sentences within:
Handle wrote:
“The bad news is that in any open-entry environment without some kind of reliably effective filter mechanism, these contrarians are definitely going to be vastly outnumbered by a huge number of cranks, misfits, oddballs, eccentrics, freaks, weirdos, losers, and underachievers, who are magnetically attracted to fringe ideas precisely because they are not able to succeed in mainstream venues. Like flies, they are attracted to both honey and feces, noticing that these are both out of the ordinary, but without being able to tell the difference in quality.”
I am well into the top 1% and my wife who is a homemaker (thus she has lots of time to shop). Our favorite grocery store id Aldi. I especially prefer their vegies and while the selection is limited, I really like their fresh fish. My view is they have higher turnover on their limited items so think their vegies are better because fresher than at Central Market (kinda of a Whole Foods without the organic twist), which is our next favorite.
But I do not really buy the average is over stuff either.
Hype to Aldis, the Germans sure know how to run an efficient system, except the one local seems to be going mainstream.
Is Patrick Watson factually correct? Are middle-class retailers doing poorly? We need more than a couple data points. Yes, Aldi is doing well, but Whole Foods wasn’t looking so strong before Amazon bought it. Are all the grocery stores in between (e.g. Kroger, Albertsons’s) doing poorly? The hardly seems correct. And is that the case for other retailers? Fast fashion would seem like a good example of a clothing retailer aimed at the middle class, and they seem to be doing great. Clothing retail doesn’t seem to diverging towards Marshalls & Armani. Is this going on in electronics retail, auto retail, furniture retail? Watson’s general assertion seems dubious and unsupported.
Yes, Trader Joe, the upmarket brother of Aldi also seems to be doing well. But I would assert Trader Joe is classic middle class.
Contra data point to average is over. Music. No money now in recorded music, as downloads have killed any profit from that. Bands have to make money from live shows. But a band can only do so many live shows, while they could sell an unlimited number of records. So current music trends favor average, and hurt elite.
The problem with all these big picture stories is that you can always cherry pick your data to support them.
I still don’t get how this is a problem here and this appears to be some kind weird lament from a rich writer who does not have a clue. I will be honest the ‘middle class’ grocers have been consolidating (and raising prices) for year and now some new entrants are winning a portion of the market. And in reality, I love shopping at Winco (West Coast store) and Aldis.
Also what is so important about shared experiences of grocery store shopping?
Please someone show me a bi modal income distribution. Then I’ll be worried. I think the trend is based on individual preference. Some people want a high end good or serivce in some area, while at the same time the same person will want basic experience with other goods or services. So this is a micro issue.
For example, my wife and I had a “date” at Burger King recently where we ate for 11 dollars. I’ll pick stuff up at the dollar store on my way home from work. I shop at Wal Mart for almost everything. But my son has two 3,000 dollar guitars.
The only fact that I could see in the story by Patrick Watson is that some big chains lost value on the news that Amazon is eyeing food retail via their acquisition of Whole Foods. Watson seems to have confused those who sell to the middle class with those doing the buying. Those other retailers stocks’ lost value because there is a presumption that Amazon will serve their customers better than they do. That’s not bifurcation. It’s just competition.
Then there’s the idea that somehow I will develop empathy for the person checking out next to me because they are buying bags of rice and I am buying caviar. But in America, food is so cheap that most of our carts are not much different and neither are our clothes for that matter. The whole premise of the article seems wrong.
Is the experience of grocery shopping much different at Whole Foods than at Walmart? I’d say it is not and the GHW Bush example is not that he was disconnected in some important way because he shopped at an upscale grocery but rather that he had not shopped anywhere recently enough to be familiar with scanners. In the last 5 years or so I would not even say that Walmart had a significantly worse selection of vehicles in the parking lot. Easier to afford the GMC Yukon if you do a fair amount of your shopping at Walmart.