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RAPAPORT... The most important U.S. consumer group is feeling better about spending, according to the latest consumer confidence data from Unity Marketing. The affluent top 20 percent, which are by far the biggest spenders in the U.S. and account for more than 40 percent of all consumer spending, increased their luxury spending by 15.9 percent in the second quarter compared with the first quarter, according to Unity Marketing's Luxury Consumption Index (LCI).
"We have seen plenty of minor spikes in affluent consumer confidence since 2010, but the latest one at the start of the third quarter 2013 feels different than the others. It has all the markings of a sustainable recovery that will give affluents the confidence to spend more freely through the end of the year," said Pam Danziger, the president of Unity Marketing and lead researcher on the quarterly Luxury Tracking Study.
Unity Marketing collected data in July from 1,189 affluent consumers with an average income of $273,000. Affluents feel more confident about the financial direction of the country as a whole, according to Danziger, with 32 percent of those surveyed believing the U.S. is better off financially now, and a sharp increase in the percentage of affluents that report spending more on luxury (27 percent in July), as compared with the previous quarter (23 percent).
"These factors taken together, along with an improved perspective on affluent's' personal financial status, give a bright prospect for continued spending by these most important of the nation's consumers. Not only is their more positive outlook measured in greater spending on high-end and luxury goods and services, the government's Retail Census also shows a strong 3.8 percent increase in retail and food service revenue for the first five months of 2013, as compared with same period previous year. The affluent are behind much of the growth in retail and food service spending, since for every dollar a middle-class household spends at retail, the affluent spend $2," Danziger said. "These findings point to a strong back-to-school shopping season, as well as good results for the upcoming Christmas season."
Unity Marketing found that the strongest categories for affluent spending this past quarter included high-end bed/table/bath linens and fabrics, which rose 51.1 percent from the previous quarter; women's handbags and shoes, men's accessories, luggage and briefcases, which jumped 37.8 percent; electronics, up 29.6 percent and furniture, lamps and floor coverings, up 26.3 percent.
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