Summary: They say a recession is when your neighbor gets fired and a depression is when you get the ax. Here we see a comparison of the financial performance of 2 important retail companies that address very different demos. Walmart is oriented toward the lower-income segment of the market while Chipotle addresses a more affluent, higher-income demo. This makes all the difference in terms of which company can pass on its own cost inflation to its customers (known as pricing power). Walmart’s customers are tapped-out because $5 gas and double-digit food inflation has left them strapped for cash. Resultantly, Walmart’s financial performance looks like the onset of a recession. While Chipotle noted that the low-income consumer has definitely pulled back their purchase frequency, the majority of its customers are higher-household-income consumers who have actually increased their dining frequency (possibly trading down from more expensive restaurants). Chipotle’s resultant financial performance for the quarter makes it look like we are in a period of strong economic growth. On a macro level, it is important to note that there are a lot more Walmart customers than Chipotle customers. This means that this recession is very real to a majority of Americans even if it has yet to slow down the rich.