Wealthy Consumers Go Shopping
While rising gas and food prices have already begun to slow
the spending habits of middle-income consumers (at least based on anecdotal
reports), the wealthiest in society appear to still be in high gear when it
comes to shopping.
Luxury retailers have been posting impressive year-over-year
gains in recent quarters as wealthy consumers benefit from record high bonuses
(in some sectors), historically low tax rates and a strong stock market.
Sentinel report pointed to the importance of the wealthiest
Americans continuing to shop. According to Moody’s Analytics, the top five
percent of income earners account for 37 percent of consumer spending in the
Caroline Baum, a columnist for Bloomberg News, recently wrote, "The
rich are spending again; the more conspicuous the consumption, the better.
Gone are the exhortations to bankers in the dark days of 2008 and 2009 to temper
extravagant behavior, act more like an everyman, shun the limo in favor of
a yellow cab, and tone down the annual Christmas bash."
Among the extravagant
purchases being made by wealthy consumers of all nationalities, according to
Ms. Baum, Boeing 747s and Airbus A380s, helicopters, high-rise buildings as
a private residence and an 11-month old red Tibetan mastiff with a price tag
of $1.5 million.
- Wealthy start shopping again – The Orlando Sentinel
food costs frustrate grocery shoppers – The Augusta Chronicle
Feel Good Again About What They Do Best: Caroline Baum – Bloomberg News
Discussion Questions: Do you expect wealthy consumers to keep up their spending even as just about everyone else cuts back due to price increases? Should retailers that do not traditionally cater to top income earners make adjustments?