Wealthy spend more as middle class cuts back
Wealthy spend more as middle class cuts back
BY SANDRA M. JONES
Copyright © 2007, Chicago Tribune
July 28, 2007
While the average American is keeping a lid on expenses, the wealthy are going on a shopping spree.
Consumer spending slowed to a 1.3 percent annual growth rate in the second quarter, down from a 3.7 percent pace in the first quarter. But among the well-to-do, spending surged an average 9 percent, according to a survey from Unity Marketing.
Home goods, jewelry and entertainment accounted for the biggest jumps in expenditures. Affluent shoppers increased spending for wall and window coverings by 62 percent, jewelry by 55 percent, entertainment by 53 percent and tabletop coverings by 42 percent, the report said.
Shoppers under age 40, a group Unity Marketing calls the "Want-It-All" generation, outspent their elders by 39 percent.
"The most aggressive future buying lies with the younger, uppermost income segments of the luxury population," said Pamela Danziger, president of the Stevens, Pa.-based luxury-market research firm. "As opposed to the older luxury consumers, the young affluents are more likely to see their financial situation improving over the next 12 months, which gives them greater confidence to spend more on the luxuries they desire."
Affluent consumers spent an average of $15,283 on luxury goods and services in the second quarter, a 9 percent increase from the average expenditure of $14,024 in the first quarter. Unity Marketing surveyed 1,000 consumers with an average income of $155,000.
DESIGNER BUY: Citigroup Global Markets Inc. analyst Deborah Weinswig upgraded Nordstrom Inc. to a "buy" Thursday, citing the department store chain's efforts to grow its designer business.
The move should help "insulate" the Seattle-based retailer from the macroeconomic pressures -- high gas prices, food inflation and the housing market decline -- that are taking a toll on moderate retailers.
Weinswig estimates Nordstrom's designer business accounts for about 3 percent to 5 percent of total sales. Expanding the high-end merchandise "should help increase sales with existing customers while attracting new customers," she wrote in a report.
Meanwhile, Macy's Inc. stopped selling designer apparel at its Water Tower Place store on North Michigan Avenue, deciding instead to consolidate its designer business in the Chicago market at one store: the 28 Shop at Macy's State Street.
Instead, Macy's plans to bring a younger, more contemporary attitude to the Mag Mile outpost.
The makeover, slated to take place from August to November, will include expanding junior and sportswear departments, adding in-store shops for St. John and BCBG Max Azria, introducing several contemporary lines including Tracey Reese and Genetic, and installing new carpeting and lighting.
Macy's, with headquarters in New York and Cincinnati, converted Marshall Field's to Macy's last fall as part of a national rebranding of about a dozen regional department-store chains.
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smjones@tribune.com
BY SANDRA M. JONES
Copyright © 2007, Chicago Tribune
July 28, 2007
While the average American is keeping a lid on expenses, the wealthy are going on a shopping spree.
Consumer spending slowed to a 1.3 percent annual growth rate in the second quarter, down from a 3.7 percent pace in the first quarter. But among the well-to-do, spending surged an average 9 percent, according to a survey from Unity Marketing.
Home goods, jewelry and entertainment accounted for the biggest jumps in expenditures. Affluent shoppers increased spending for wall and window coverings by 62 percent, jewelry by 55 percent, entertainment by 53 percent and tabletop coverings by 42 percent, the report said.
Shoppers under age 40, a group Unity Marketing calls the "Want-It-All" generation, outspent their elders by 39 percent.
"The most aggressive future buying lies with the younger, uppermost income segments of the luxury population," said Pamela Danziger, president of the Stevens, Pa.-based luxury-market research firm. "As opposed to the older luxury consumers, the young affluents are more likely to see their financial situation improving over the next 12 months, which gives them greater confidence to spend more on the luxuries they desire."
Affluent consumers spent an average of $15,283 on luxury goods and services in the second quarter, a 9 percent increase from the average expenditure of $14,024 in the first quarter. Unity Marketing surveyed 1,000 consumers with an average income of $155,000.
DESIGNER BUY: Citigroup Global Markets Inc. analyst Deborah Weinswig upgraded Nordstrom Inc. to a "buy" Thursday, citing the department store chain's efforts to grow its designer business.
The move should help "insulate" the Seattle-based retailer from the macroeconomic pressures -- high gas prices, food inflation and the housing market decline -- that are taking a toll on moderate retailers.
Weinswig estimates Nordstrom's designer business accounts for about 3 percent to 5 percent of total sales. Expanding the high-end merchandise "should help increase sales with existing customers while attracting new customers," she wrote in a report.
Meanwhile, Macy's Inc. stopped selling designer apparel at its Water Tower Place store on North Michigan Avenue, deciding instead to consolidate its designer business in the Chicago market at one store: the 28 Shop at Macy's State Street.
Instead, Macy's plans to bring a younger, more contemporary attitude to the Mag Mile outpost.
The makeover, slated to take place from August to November, will include expanding junior and sportswear departments, adding in-store shops for St. John and BCBG Max Azria, introducing several contemporary lines including Tracey Reese and Genetic, and installing new carpeting and lighting.
Macy's, with headquarters in New York and Cincinnati, converted Marshall Field's to Macy's last fall as part of a national rebranding of about a dozen regional department-store chains.
----------
smjones@tribune.com
posted by Carlos T Mock at 7:08 AM
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