The devil wears Walmart

You've probably heard the story about the Lexus in the Walmart (WMT) parking lot. Or the Costco (COST) shopper stuffing the 48-roll pack of toilet paper into the trunk of a Mercedes-Benz. Like an urban legend, the details differ, but the gist is the same: Even the rich have downsized their shopping.

Except this isn't a myth, according to most retailers. Wealthy shoppers are still shopping, but they're buying private-label clothes at department stores and designer goods at outlets. So stores that cater to them are downscaling the merchandise, offering more private labels and cutting prices on designer items.