Black Friday just passed and investors and luxury retailers are now looking toward upscale shoppers hoping they open their wallets this holiday season to further improve the struggling retail market.
The official start of the holiday season began as people lined store fronts early on Black Friday to be a part of what many were hoping would be a very successful retail rebound. But now investors and luxury stores are turning their attention toward more upscale shoppers in hopes that their thicker wallets will reach a more specific retail market. Luxury goods.
Shares in luxury retailers such as Tiffany, Saks, and Nordstrom all rose a few days prior to Black Friday, and Dan Greenhaus, chief economic strategist at Miller Tabak, said, “We’re resting our (upbeat outlook) on the upper-income consumer, who seems to be holding up pretty well. Greenhaus is hoping that a recent restoration of some of last year’s lost wealth has helped to boost confidence and spending power amongst higher-income shoppers.
Greenhaus continues to says, “The vast majority of spending in this country is done by the upper-income consumer and people feel a lot better this Christmas than they did last Christmas.”
But the whole situation isn’t as peachy-keen as some may want us to think. It appears that there is a big difference in what high- and low-income households are planning on spending this year, which could continue to negatively impact the economy. In a recent survey of 1,002 consumers, it was found that those earning more than $70,000 a year plan to indeed increase their holiday spending by approximately 27 percent; however, those earning less than $40,000 a year are planning on cutting their spending by 14 percent.
Despite this confounding variable, some are remaining optimistic when they simplify everything into a comparison to last year. Retailers that are anticipated to see an increase in sales this year include Williams-Sonoma, Banana Republic, and online giant Amazon. Individuals looking for more of a bargain are more likely to head toward Costco and the Dollar Store, according to one report.
Retailers have taken a different approach to this holiday season than last by cleaning out their inventories so that they won’t be forced to cut prices as much as they had to last year. “You won’t see retailers throwing themselves out of a window to sell stuff,” adds Greenhaus.
But we should keep in mind that beating last year’s sales won’t necessarily be hard considering the 2008 holiday season saw retail sales falling 9.5%, the most seen since 1960. Either way, any increase is still an increase, and retailers are hoping that those higher-income individuals who plan to increase their shopping this year actually follow through.
Via: USA Today