An interview with Stephen Quinn, Chief Marketing Officer at Walmart, in Fortune (Dec 26,2011) describes the “hourglass economy” in the US in 2011, with a decrease in the size of the middle class, lowered spending capability for the lower percentiles and continued robustness at the top income levels. The impact – the need for a wider assortment with different price points to serve this customer base. WalMart’s experience in the fishing aisle describes the danger in cutting assortments – at some point customers forget the existence of a fishing aisle at the store. What other consequences will the hourglass economy have on retail supply chains ? Given the difficulty in predicting demand in such a context, how should retailers manage margins across the SKUs offered to maintain profitability ?