American shoppers cut down on luxury
By Anne D'innocenzio |
July 9, 2010, Friday
|
Print Edition
Print Edition
AFFLUENT Americans went back to tightening their belts in June after months of showing other shoppers how to spend, raising concerns for the overall economy.
Data released late Wednesday by MasterCard Advisors' SpendingPulse shows that luxury spending dropped in June for the first time since November.
After a surprisingly solid start to the year, overall spending also has slowed in recent months, and analysts are concerned that shoppers will remain tightfisted through the crucial holiday season.
The 3.9 percent decline in luxury spending from a year earlier is particularly worrisome because the well-heeled ?? households with annual incomes in the top 20 percent, about US$158,000 on average ?? account for almost 40 percent of consumer spending.
And a downtrend in luxury spending, which excludes jewelry but includes upscale clothing, accessories and restaurants, could signal trouble for retail and in turn for the broader economy. Consumer spending ?? including such major expenses as health care ?? makes up about 70 percent of United States economic activity.
Citi Investment Research analyst Deborah Weinswig and other analysts said the small increases in inventory that stores have ordered for the fall and holidays could end up being too much, meaning greater discounting, which would hurt retailers' profit.
Data released late Wednesday by MasterCard Advisors' SpendingPulse shows that luxury spending dropped in June for the first time since November.
After a surprisingly solid start to the year, overall spending also has slowed in recent months, and analysts are concerned that shoppers will remain tightfisted through the crucial holiday season.
The 3.9 percent decline in luxury spending from a year earlier is particularly worrisome because the well-heeled ?? households with annual incomes in the top 20 percent, about US$158,000 on average ?? account for almost 40 percent of consumer spending.
And a downtrend in luxury spending, which excludes jewelry but includes upscale clothing, accessories and restaurants, could signal trouble for retail and in turn for the broader economy. Consumer spending ?? including such major expenses as health care ?? makes up about 70 percent of United States economic activity.
Citi Investment Research analyst Deborah Weinswig and other analysts said the small increases in inventory that stores have ordered for the fall and holidays could end up being too much, meaning greater discounting, which would hurt retailers' profit.
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