Although recent economic data remains resilient, consumer confidence in the US has not fully recovered, leading to more cautious consumption habits.

In this round of US stock earnings season, the American retail giant $Target (TGT.US)$ has downgraded its profit expectations twice in three weeks; the largest discount retailer in the United States, Dollar General, $Dollar General (DG.US)$ had a disappointing performance in the second quarter.And lowered its full-year performance guidance, causing the company's stock price to plummet, marking the largest single-day decline in history, all pointing to a dim consumer outlook.

"Buffett's new favorite" Ulta and "yoga pants queen" Lululemon Athletica's latest quarterly performance also fell short of expectations, implying that consumers are starting to shift more of their spending towards necessities and reduce their purchases of luxury goods and non-essential items. $Lululemon Athletica (LULU.US)$ The latest quarterly performancealso fell short of expectations, indicating that consumers are beginning to allocate more of their expenses towards necessities and reduce their purchases of luxury goods and non-essential items.

Data from the Conference Board shows that the US consumer confidence index rose to a six-month high in August, but confidence among low-income consumers with annual incomes below $25,000 has declined.

The trend of 'downgraded consumption' is spreading.

It's worth noting that not only luxury goods and non-essential items, but also the consumption of necessities by US consumers is starting to be downgraded.

According to a survey conducted by Dollar General, over 60% of customers said that due to rising prices, they had to make sacrifices in purchasing essential necessities, and most people said their financial situation was worse than six months ago.

Some analysts pointed out that Dollar General's financial pressure may stem from a lack of a broad customer base. Although overall consumption is weak, the economy still shows resilience, and the economic pressure on middle and high-income consumers is not enough to make them turn to dollar stores.

"We still believe that a robust employment environment is hindering consumers from massively turning to dollar stores like Dollar General," wrote Scot Ciccarelli, a stock analyst at Truist Securities, in a report.

"However, middle and high-income groups have started to downgrade from mid- to high-range department stores to large discount retailers, as evidenced by the financial reports of major chain retailers."

However, middle and high-income groups have started to downgrade from mid- to high-range department stores to large discount retailers, as evidenced by the financial reports of major chain retailers.

Mid to High End Department Store$Macy's (M.US)$Kohl's and Dillard's both reported a year-on-year decline in comparable sales in their latest financial reports. As a major department store targeting middle-income consumers, Kohl's stated that its customers are experiencing a higher cost of living burden.

Upscale department store$Nordstrom (JWN.US)$It also stated that its second-quarter comparable sales growth of 0.9% was largely due to a 4.1% year-on-year increase in sales at its discount chain Nordstrom Rack, mainly supported by high-income consumers.

As a representative of large-scale affordable supermarkets, Huashang Jianwen previously mentioned that$Walmart (WMT.US)$The prices of its groceries are about 25% lower than traditional supermarkets, and its second-quarter performance achieved "contrary growth", with both revenue and profit exceeding expectations, and it stated that its market share among high-income households is increasing.

Considering that more and more wealthy people are starting to "downgrade" their consumption, Kohl's stated that it expects to be "more promotional than ever" during the holiday season, while Dollar General explicitly stated that it will offer more discounts in the coming quarters.

Editor/Somer