Luxury Index Takes A Tumble
With apologies to F. Scott Fitzgerald, the very rich, apparently, aren’t that different from you and me. The Luxury Consumption Index (LCI) that has been compiled by Stevens, Pa.-based Unity Marketing since 2003 hit its lowest level in October after dropping 10.7 points to 40.3 points.
According to Pam Danzinger, Unity Marketing’s president, the dip shows that “affluent consumers’ negative feelings about their economic situation are translating into changes into their shopping behavior. Since the middle of 2007, the LCI has been in free fall, dropping more than half its value.”
Danzinger said the survey of 1,161 affluent consumers (with an average income of $210,000) showed that 56 percent are spending less on luxury than they were a year ago, and 54 percent expect to be spending less in the next 12 months.
Danzinger said the high-income consumers report that they’re shopping more strategically by looking for sales, are trading down to less premium brands and are staying out of stores to resist tradition.
“They are still indulging in luxuries, but they are being more selective in what they choose to indulge,” Danzinger said.