New York—Although a new survey of ultra-wealthy U.S. consumers by the Luxury Institute found pentamillionaires plan to spend more money this year on travel, dining out and their wine cellars, 80% said luxurygoods are less important.
In its 2013 State of the Luxury Industry report released Tuesday, the Luxury Institute surveyed pentamillionaires consumers—those with a net worth of at least $5 million and with a minimum household income of $200,000—on their spending plans for the rest of the year.
According to the survey, “jewelry sales especially may be under some pressure, with 25% of the ultra-wealthy saying they will spend less or much less through the remainder of 2013. Handbags are the focus of planned spending cutbacks by 20% of those surveyed.”
Emphasis: ‘Unrivaled Quality, Craftsmanship, Service’
Milton Pedraza, Luxury Institute’s chief executive, said: “Even among the wealthiest consumers, luxury goods and services are considered less important in today’s economy. Luxury brands can capture these increasingly discerning ultra-wealthy consumers by providing unrivaled quality, craftsmanship and service.”
What will these affluent consumers be spending more on? A third plan to spend more on leisure travel. Another 20% of the ultra-wealthy plan to spend “more” or “much more” on dining out, and 19% plans to spend more on wine. Other areas of increased spending include health & fitness (17%) and vacation real estate (17%).
Similarly, Bain & Co. along with Atlagamma, an Italian luxury trade association, recently released their 2013 luxurygoods survey that forecast only 4% to 5% rise in worldwide luxurygoods sales this year compared to a 10% increase last year (at constant exchange rates). The study attributed the decrease to continued slow sales in Europe and a slowdown in luxury spending in Asia-Pacific.
The Bain study also forecast a compound yearly growth rate in luxurygoods sales of 5% to 6% a year between 2013 to 2015—with some additional positive news for luxury marketers: total size of the luxurygoods market is expected to reach 250 billion euros (about $273 billion) by 2015.