As a result, consumers have flocked to value retailers like T.J. Maxx and H&M, while department stores and specialty shops that cater to the middle class have been squeezed. This shift has also led to a flood of outlet stores and low-price spinoff concepts, as traditional players fight to remain relevant with this new breed of shoppers.
"All these off-pricers are growing, but at the expense of what?" said Farla Efros, president of HRC Advisory. "Are we now pushing [consumers] again toward lower-priced items? ... We're changing the landscape again."
Analysts have also pointed to Irish fast-fashion retailer Primark as a red flag for the U.S. market. Its rock-bottom prices, which make a pair of jeans from H&M look like a splurge, have the potential to once again lower consumers' expectations of how much a piece of clothing should cost.
Making things even more challenging for retailers this holiday season is an abundance of inventory, brought on by above-average fall temperatures across much of the U.S. Macy's CEO Terry Lundgren warned earlier this month that deep inventories will inevitably lead to discounts in the fourth quarter.