Siddharth Cavale

NEW YORK, (Reuters) – This week’s earnings from retailers showed a divide in the shopping habits of Americans with more and lesser wealth who are dealing with high inflation.

Stores that sell to lower-income customers claim that as inflation rose, so have their spending habits. The department stores that sell to higher income shoppers report that they have shown resilience and bought tailored suits, gowns and footwear.

Dollar General (NYSE 🙂 announced that consumers are purchasing food and drink products over apparel, home, and seasonal items on Thursday. Rival Dollar Tree (NASDAQ) stated that customers were reacting “favorably to” its “greater-value” products as well as its wider range of merchandise priced between $3 and $5.

Dollar Tree Stores had the strongest quarter in company’s history. The same-store sales rose by 11.2%

Macy’s (NYSE :), a department store that caters to middle to high-income shoppers, saw customers spend their money on beauty and fashion products, as well as tailor suits, gowns, etc.

Sales at its upscale Bloomingdale’s department stores rose 28% in the first quarter, while they rose 25% at its luxury beauty outlet Blue Mercury. Jeff Gennette, CEO of Macy’s, stated that customers who earn more than $75,000 per year are “very healthy” and their spend is very strong.

Gennette stated that even though households earn less than $75,000 per year were the most affected by inflation, Gennette noted that they spend more time at Macy’s discount stores.

Macy’s reiterated its full-year sales guidance after numerous retailers like Walmart (NYSE :), and raised its earnings forecast. Target (NYSE:) And rival Kohl’s (NYSE :), both had reduced forecasts, citing inflation and inventory issues, as well as supply chain problems.

Nordstrom (NYSE :), Macy’s counterpart, also bucking the trend for gloomy outlooks by issuing a solid increase to its forecast.

Dollar Tree CEO Michael Witynski said that he is increasing investments in labor and distribution.

On Thursday, he stated that “We have taken the appropriate actions to ensure we are positioned for acceleration in growth in this sector I believe is the most desirable in retail,”

Walmart, the bigger rival, disclosed last week in earnings that some shoppers are saving money by buying more “private-label” store-brand lunch meats, deli and bacon, as well as dairy products. Walmart reported that lower-income customers have also switched to milk in half-gallon bottles over full-gallon.

Walmart also sells more expensive items, such as patio furniture and gaming consoles.