The company you keep. This profile of shopping mall-developer Rouse Co. reveals how shopping destinations are increasingly becoming stratified:

Mall building is in turmoil. There are more malls than people want, which forces those of lesser quality to close. People with low to moderate income who used to shop at department stores such as J.C. Penney and Sears increasingly favor "big box" stores such as Target, Wal-Mart, and Kohl's.

"Wal-Mart will build 210 new super centers in 2003," said retail consultant John C. Melaniphy III. "Target's going to build 90 stores, Kohl's 80, but if you look at Federated [Department Stores], they'll open 11 stores. The growth just isn't there for department stores."

Rouse concluded that its best chance to make money on malls is in eschewing the middlebrow and making malls appeal to the upper-middle class. Company executives figure that the middle class may defect from such stores, but that the more affluent will not be nearly so tempted by the price advantages of the big-box stores.

The sheer size and power of Wal-Mart and similar low-cost retailers is eliminating the middle ground: you either sell based on low prices and limited service, or you target the affluent. It is getting increasingly uncomfortable for anyone trying to be in the middle. And, as this story shows, it's getting even harder because the physical middle is dissappearing too. So in the not too far future you may have to decide if you want have Wal-Mart and the dollar store as your neighbor or Saks Fifth Avenue and Louis Vuitton. Tell me who your neighbors are and I'll tell you who your customers are.