• Washington Post, Thursday, September 10, 2009 10:31 AM

The shoppers formerly known as "affluent" may hold the key to a consumer recovery, reports Ylan Q. Mui, but right now they are hiding behind the cover of the New Frugality. "Unless these people turn up, a lot of companies won't turn up," Milton Pedraza, founder of the Luxury Institute, tells her. "When they are not spending, it definitely impacts all of us in a negative way."

The top 20% of households -- with income of at least $150,000 -- account for 40% of all spending. Stock prices are up, and there are signs that the real estate market is stabilizing but wealthy shoppers aren't doling out the bucks yet even if two recent surveys indicate that their confidence in the economy is up and they're not as worried about money as other demographic groups. The bottom line is that luxury department stores reported a 12% decline in August sales from 2008.

But that may change. "It's not that [rich folk] don't want to spend the money," says Joyce Neave, a personal shopper based in Bethesda, Md. "They just don't want to spend it wrong."

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