Rich's Luxury Spending Will Increase By $26.6B This Year, Poll Finds
NEW YORK (Michelle Nichols) - Rich Americans are expected to spend an extra $26.6 billion on luxury goods this year but they will do so with an eye toward value as the country recovers from recession, a poll released on Friday found.
Spending on luxuries, excluding cars and travel, is set to rise 8 percent to $359 billion compared to 2010, according to the sixth annual American Express Publishing and Harrison Group survey.
While the number of affluent families planning to spend more has almost doubled in the past three years, they are emerging from the recession seeking value, quality and service for their money, said Jim Taylor, vice chairman of Harrison Group.
"There will be more money spent, but it doesn't mean it won't be spent without the prudent skills learned as the result of a very difficult recession," Taylor said.
"This is a survivor's economy with people who have succeeded in surviving the recession demanding a new form of respect," he told a news conference.
The Survey of Affluence and Wealth in America polled 1,458 families with a discretionary income of more than $100,000 -- representing the wealthiest 10 percent in the United States who account for about 50 percent of all consumer spending.
It found that 15 percent of these families plan to spend more in 2011, up a quarter from 2010 and almost double from 2008. The number of families cutting spending was nearly halved from last year to 9 percent and down two-thirds from 2008.
Rich families save an average of a quarter of their incomes annually, the poll found, and 34 percent said they were looking forward to spending more money this year.
Taylor said that while 70 percent of affluent Americans still believe the country was in recession, they were less anxious. Concern over job loss has fallen 50 percent from 2010 and worries about the potential failure of their companies are down to 11 percent from 28 percent.
Almost three-quarters said they had become more resourceful because of the recession.
"In the end, the increase in spending we foresee is not a return to the wanderlust of the past, but rather, an expression of sensible, resourceful, self-confident consumers expanding their portfolio of needs," he said.
"The nearly $4 trillion in their money market funds gives these consumers the power to purchase with cash. Their value equation reflects the price of recession: mature judgment," Taylor said.
A 2010 stock market rally, which pushed up the Dow Jones Industrial Average 11 percent, has also helped sway consumers.
Consumer spending, which accounts for 70 percent of U.S. economic activity, grew at a brisk 4 percent pace in the final three months of last year.
But U.S. retail sales posted their smallest gain in nine months in March, as auto sales plunged and consumers felt the sting of higher gas prices.
The online wealth survey was conducted from January 31 to February 14 and had a margin of error of plus or minus 3 percentage points.
(Editing by Xavier Briand)
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