Luxury Spending Up, But Wealthy More Cautious
Despite lingering concerns about the economy, a new report from American Express Business Insights says luxury sales are up, gaining 9% in the second quarter.
While spending in each of the four categories it analyzed increased, furniture and home furnishings showed the biggest improvement -- up 21% -- followed by sales at luxury department stores, which rose 15% in the quarter. (Women powered those department stores sales, making 69% of purchases. And 22% of all charges came from shoppers ages 36 to 45.)
While sales also rose in the apparel and accessories (up 9%) and jewelry sectors (up 12%), the report says growth slowed in each of those categories as the quarter progressed, indicating renewed fears about the fledgling recovery. Jewelry sales gained only 3% in June, for example, the smallest increase in the last eight months.
A new survey from Unity Marketing, which focuses on affluent consumers, reports that 73% believe the recession is still continuing, no matter what the economists say. Some 21% believe the economy is in recovery. Unity, which conducted the research in July among adults with an average annual income of $307,000, also found that 44% of this group plan to spend less and to save and invest more, in the 12 months ahead.
Specifically, they said they were planning to shop less, cut back on dining out, do more comparison shopping, and even clip more coupons.
"A recession is not only an economic event," Pam Danziger, president of Unity Marketing and lead researcher, writes in the report, "it is also a cultural one. When affluent consumers believe that a recession is on and might continue for a year or more, they are far more likely to take steps to curtail unnecessary spending."
While affluents account for just 20% of U.S. households, they spend more than 40% of the $4 trillion spent at retail every year.