THE STAPLES PARADOX: Inelastic Demand but Spending Compression from Income Loss

A Macro Intelligence Memo | June 2030

Food and consumer staples demand had remained inelastic (demand doesn't decline even as prices increase) but spending had been compressed by income loss for displaced workers. Consumers spent less on premium staples, shifted to private label and discount options, and reduced consumption of discretionary staples (premium beverages, specialty foods).

By June 2030, staples consumption by household income level had bifurcated sharply: - High-income households: increased premium staples spending (+18%) - Middle-income households: shifted to value options - Low-income households: reduced staples spending (-8% despite inelasticity of demand reflecting reduced ability to purchase)

Retailers had responded by expanding private label and value options. By June 2030, private label represented 45% of staples market (up from 28% in 2024), reflecting consumer price sensitivity.

END MEMO