The Trade-Down Effect

In recent months<!----> we have seen soaring fuel and food prices, declining
home prices and home equity, a fairly high increase in the unemployment
rate and an economy which has slowed considerably from its levels just
a few months earlier. Yet at the same time, we are seeing the consumer
holding up better than many folks had anticipated. So where are people
spending money?

Obviously, some of this is due to an increase in gasolinepurchases, but we also see some strength out of select retailers on thevery high end where a falling dollar has made US goods less expensivefor foreign tourists, and then we see relatively healthy growth out ofsome of the so-called trade down retailers who benefit from consumerslooking for better bargains. Some of these trade down retailers such asWal-Mart (WMT) or Big Lots (BIG) along with the wholesale stores (BJ's, Sams Club,Caustic, e