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A Return to Luxury: Consumer Spending on Luxuries Rises, Spurring Growth for Many Businesses

Guest post by: Jocelyn Chavez

Article Overview: After swearing off excessive spending and shunning frivolous purchases, consumers appear to be ready to indulge again and are treating themselves to the most splurge-worthy items. Recently released retail sales figures point to strong growth in the luxury goods sector. From luxury homes and vehicles, to high-end fashion apparel, upscale dining and modest luxuries like haircuts and gourmet coffee, people are once again partaking in products and services they’d forgone amid the economic downturn. With consumer spending on luxuries rising, the pent up demand that’s being unleashed is spurring economic growth and benefitting businesses; making this an ideal time to tap into the momentum and own a business that offers consumers sought-after luxuries.

A Return to Luxury: Consumer Spending on Luxuries Rises, Spurring Growth for Many Businesses

After swearing off excessive spending and shunning frivolous purchases, consumers appear to be ready to indulge again and are treating themselves to the most splurge-worthy items. Recently released retail sales figures point to strong growth in the luxury goods sector. From luxury homes and vehicles, to high-end fashion apparel, upscale dining and modest luxuries like haircuts and gourmet coffee, people are once again partaking in products and services they'd forgone amid the economic downturn. With consumer spending on luxuries rising, the pent up demand that's being unleashed is spurring economic growth and benefitting businesses; making this an ideal time to tap into the momentum and own a business that offers consumers sought-after luxuries. Whether you're interested in owning an established retail or restaurant franchise, a popular coffee concept, or a proven spa, salon or beauty business, there are an array of franchises and business opportunities that enable you to cater to the growing demand for large and small luxuries.

If bustling, upscale stores and restaurants seem even busier lately, they are. Sales at high-end stores and restaurants rose 8.5% in March, 2011, marking the sixth consecutive month of growth and the largest year-over-year increase since December 2010, according to MasterCard Advisors SpendingPulse, a macroeconomic indicator that tracks consumer retail spending.

Fashion-starved consumers, who have gone without, are not settling when it comes to indulging their clothing cravings. Many style-conscious shoppers are bypassing mid-range merchandise, in favor of high-end brands. Overall luxury fashion spending is up 35% in the past year, yet mainstream fashion spending rose only 8% since last year, according to the most recent data from American Express Business Insights, which tracks the spending habits of its' 90 million cardholders.

In addition to embracing upscale apparel and fine dining, consumers are also spending on other small luxuries again. A recent, 2010, annual survey conducted by BIGresearch for STORES magazine, asking consumers which products and services they consider "untouchable," and cannot live without, and which expenses they deem "expendable," and are willing to forgo, finds that consumers are starting to enjoy the same discretionary services and items that they may have previously forsaken due to the economic dip. The percentage of consumers unwilling to cut expenses increased from the previous year in many of the 36 product/service categories. Some of the leading product categories topping the list of untouchables that consumers are increasingly enjoying include:

• Haircuts and color, department store shopping, and casual sit-down dining, which were among the key categories that returned to the untouchable list.
• Internet service, which topped the list of untouchables (with 81.5% of respondents choosing not to go without this expense).
• Additional products and services highlighted on the untouchables list include: fast food dining, mobile/cell phone service, fast-casual dining, a new pair of shoes, a new pair of jeans, upgraded mobile devices (such as cell phones, smart phones, iPads and eReaders) and a daily cup of gourmet coffee (16.7%).

With consumer spending on the rise in numerous areas and the economy rebounding, a wide-range of sectors are experiencing increased demand. Franchises and business opportunities provide you with the chance to become part of the industry of your choice, as previous experience typically is not necessary. So regardless of whether you're interested in owning a retail business, a full-service restaurant, a fast food concept, a consumer electronics or Internet-related business, an established salon franchise, or a beloved coffee concept, now is an ideal time to start exploring your options.

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Article Tags: consumer spending, economic growth, fine dining, gourmet coffee, haircuts, highend, luxury goods, luxury homes, luxury index, luxury sector, restaurants, retail, retail sales figures, stores, upscale, upscale stores



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Re: Avon/ Amway - Consumer spending behaviour dictates that during down times, consumers will be MORE apt to spending on personal hygeine and personal therapeutic items. This is why you see companies like Avon, Mary Kay, etc advertising more and finding new sales associates. Not everyone will have a job, but most people have friends to sell things too!
Re: Fill in the blank: The biggest thing I waste my time on is: - I thought of online games as a way to relax a bit or to get a break from writing. I used to play RPG too like Ragnarok and I'll admit that sometimes I do like to try the RPGs on facebook whenever i see my nephews and nieces playing them. But I know that once I get started, i would be addicted, so better not even Try. David is right! Spending time on internet marketing is far more productive and can be fun too! [quote="Mal Tindle":14m5rb9v]Hi members, Like Rachel, my biggest waste of time was when I was invited to be a neighbour for a friend on Farmville (or was it Farmtown, not sure). Being quite competitive I found myself spending time on that which I thought was a harmless diversion at the time. I came back to my senses after a while and got back to Internet Marketing. Mal.[/quote:14m5rb9v]
Re: HOw to market a B2B consulting company - [quote="zohahunt77":428owzbi]Hi, I was wondering if anyone can tell me the difference between B2B and B2C. I don’t know about b2b marketing but I have done marketing so know things about it. I will suggest you to take online services which will spread your business all over web network. Online marketing is the best way to market any business.[/quote:428owzbi] B2B = Business to Business - You are marketing to other businesses. B2C = Business to Consumer - You are marketing to consumers.
What the Better Business Bureau does - [quote:1urk8etq]There is such a diversity of businesses out there, how effetive are they in protecting the consumers or entrepreneurs[/quote:1urk8etq] The way I understad it, at least here in the US, every BBB chapterhas a website, and on that website is a list of companies who have had complaints about them. People trying to decide if they want to use a company check that list...and if there's no complaints.... That's why it's imperative for people who have been ripped off to complain to their BBB. It might not help them, but it will help other people down the line. On the other hand, people do sometimes maliciously make complaints about businesses - so I tink the BBB does talk to both sides to see what's what... In addition to the BBB, each state has its own Consumer Protection Agency, and they also inspect claims of wrongdoing.
Re: E-Commerce Spending Down? - Spending might be down, but there's still plenty of spending being done. Only a 2% decrease is hardly anything to worry about. As Kevin pointed out, I've noticed eBay sellers offering free shipping, but increasing the starting cost or Buy It Now price. So, in reality you're still paying for the shipping. I'm one who likes to buy online, mainly because it's a lot easier and I don't have to deal with the mad rush at malls and shopping centers. I'll shop around for the best price online, mainly looking at eBay or Amazon. However, if I happen to get into a crunch, then I'll just suck it up and go to the store and pay full price. Sometimes you just have to, but I try to avoid that situation. As Kevin also mentioned about shipping prices on eBay, I, too, have noticed that some sellers really inflate the price, even for US shipping. I avoid those sellers unless I can still get it cheaper through them than someone else, but most of the time you won't. It doesn't make any sense, and I would hate being out of the country and getting completely ripped off.


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