Wealthy Consumers to Rein in Holiday Spending
Only 6 percent of those with $50,000 or more in net worth plan to make a major purchase this holiday season, according to research by Lake Forest, Ill.-based investor website millionairecorner.com. The 6 percent is consistent for men and women, but varies by age, with 14 percent of those 40 and younger planning a big purchase compared to 4 percent of those 60 and older.
Of those 6 percent who plan to spend big this year, their categories of choice include electronics (47 percent); vacation/travel (30 percent); jewelry (27 percent); automobile (26 percent); recreational vehicle (1 percent); and other (16 percent).
“The wealthy are more conservative regarding their holiday spending because they realize that they are the ones who will be most impacted by increased taxes next year,” Catherine McBreen, president of millionairecorner.com, told Progressive Grocer. “Regardless of whether or not we fall over the fiscal cliff, wealthier households know they are going to be subject to a tax hike of some amount.”
Consumers across all wealth segments are staying conservative with their holiday budgets this year. In fact, 86 percent plan to spend the same or less for the holidays compared to last year, while just 14 percent say they will spend more. The wealth segment breakdown for those spending the same or less is as follows:
- 91 percent of investors with less than $100,000 in net worth, not including primary residence
- 88 percent of investors with $100,000 to $499,000 in net worth
- 82 percent of those with $500,000 to $999,000 in net worth
- 86 percent of investors with $1 million or more in net worth
Investors with $100,000 or less in net worth are cutting back the most, with 20 percent spending less and another 7 percent spending much less.
“[Consumers] are also not positive about the overall market climate,” added McBreen. “Our recent polling indicates that their confidence level is the lowest in more than a year. This is unlike those with less wealth who feel that things are getting better.”
Millionaire Corner is published by Spectrem Group, the Chicago-based research and consulting firm in the wealth and retirement industry.