A DIVERGENT TALE OF 2 RALPHS

K-shaped economic model demonstrates the high earner-blue collar divide

- By Caroline Petrow-Cohen

Photographs by JULIANA YAMADA Los Angeles Times A SHOPPER at a Ralphs store this month in West Hollywood, top. Its customers seek out bargains. In Beverly Hills, above, people leave a Ralph Lauren store.

John and Theresa Anderson meandered through the sprawling Ralph Lauren clothing store on Rodeo Drive, shopping for holiday gifts.

They emerged carrying boxy blue bags. John scored quarter-zip sweaters for himself and his father-in-law, and his wife splurged on a tweed jacket for Christmas Day.

"I'm going for quality over quantity this year," said John, an apparel company executive and Palos Verdes Estates resident.

They strolled through the world-famous Beverly Hills shopping mecca, where there was little evidence of any big sales.

One mile away, shoppers at a Ralphs grocery store in West Hollywood were hunting for bargains. The chain's website has been advertising discounts on a wide variety of products, including wine and wrapping paper.

Massi Gharibian was there looking for cream cheese and ways to save money.

"I'm buying less this year," she said.

"Everything is expensive."

The tale of two Ralphs shows how Americans are experiencing radically different realities this holiday season.

It represents the country’s K-shaped economy — the growing divide between those who are affluent and those trying to stretch their budgets.

Some Los Angeles residents are tightening their belts and prioritizing necessities such as groceries. Others are frequenting pricey stores such as Ralph Lauren, where doormen hand out hot chocolate and a cashmere-silk necktie sells for $250.

In the K-shaped economy, high-income households sit on the upward arm of the “K,” benefiting from rising pay as well as the value of their stock and property holdings. At the same time, lower-income families occupy the downward stroke, squeezed by inflation and lackluster income gains.