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In Between the Numbers: Weddings, Child-Birth, and US Retailing

July 10, 2011
at 4:52 pm PST

 I learned long ago that demography is destiny for retailers.

 Baby booms mean more diapers and formula, more home remodels, more school supplies. The aging of Baby Boomers means more traffic for drug chains and grocers with pharmacies. Growing Hispanic populations mean different assortments in grocery and different scents in soaps and personal fragrance.

 Demographic destiny for retail certainly came to mind when I read an analysis on the composition of current US households in the June 23 issue of The Economist.

 Citing recent US Census Bureau data, the article noted that married couples, for the first time, make up less than half (45%) of all households.

 But what hit me – and ought to keep mid-price merchants from Bentonville to Hoffman Estates awake at night – is a now-yawning education-marriage gap.

 Simply, and with a broad brush: College-educated women are walking the aisle. Women with a high school education or less do so much less frequently. Some 94% of births to college-educated women take place within a marriage. That compares to 56% of births to women with a high school education or less.

 This is not a morality tale. It’s a story of disposable income and the disappearance of the Great Middle of US retailing.

 College-educated women with higher income opportunities are more often raising kids in two-income households. Say hello to Whole Foods. Women with high school educations or less – with lower income opportunities – are more often raising kids in single-parent households. Welcome to Aldi.

 I suppose it should come as no surprise that the same issue of The Economist described the significant business opportunities for retailers serving the bottom of the US economic pyramid.

 If demographics are destiny, that bottom part of the pyramid looks like a growth market for years to come.

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