Why Costco is targeting the rich, with deals on Rolexes, 10-carat diamonds, and gold bars

Costco's success selling luxury goods like Rolex watches and Dom Pérignon highlights a shift in consumer spending. The top 10% of US earners now account for nearly half of all spending, significantly impacting retail strategies. This affluent group's increased spending, up 12% year-over-year, is boosting sales in sectors like travel and luxury goods. Retailers are adapting, with Walmart expanding its high-end product offerings to attract wealthier customers. Costco's existing focus on higher-income shoppers and reputation for value make it uniquely positioned for this market. The company's success selling luxury items is attributed to its focus on quality and value, not just low prices. Costco emphasizes offering better deals on higher-priced goods, differentiating itself from dollar stores. However, the widening wealth gap and rising consumer debt pose larger economic concerns. While retailers pursue wealthier consumers, many still struggle to find affordable necessities.