Wealthy Americans are heading into holiday conspicuously lacking in seasonal spirit.
A study by Unity Marketing of 1,208 consumers with average incomes of $267,000 revealed a sharp downturn in the spending intentions of the affluent for both the holiday season and the next 12 months. This was coupled with a less-optimistic view of economic conditions in general and their own financial opportunities in particular.
One-quarter of respondents said they would spend less on holiday gifts this year and 18 percent expect to spend more. The average gift budget among these consumers is $1,730.
The less-generous holiday approach is mirrored by spending intentions for the coming year. Just 20 percent said they plan to spend more in the coming 12 months versus 28 who expect to spend less. That’s a reversal of the responses one year ago, when 31 percent anticipated a boost in their spending and 18 percent a reduction in it.
The survey was taken from Oct. 3 to 10, just after the start of the government shutdown. Pam Danziger, president of Unity, emphasized that recent erosions in sentiment and luxury spending, as measured by her firm, suggest “a weak turnout for the holiday shopping season this fourth quarter” and concern among wealthy individuals about “continued uncertainty ahead in terms of governmental policy and its impact on business.”
Half of the respondents said they believe the economy is headed in the wrong direction, more than twice the 24 percent who felt that way one year ago.
Their reservations extend to their own financial circumstances, with only 40 percent expecting improvement in the next year, down from 52 percent a year ago.
“Affluents generally are very optimistic about their ability to weather financial ups and downs, but in the latest survey, they express an uncharacteristic pessimism,” Danziger said.
She added that retailers “will have to pull out all the stops in terms of promotions and discounting this season” to attract the wealthy, who place bargain pricing ahead of all other considerations in making holiday purchases despite their high incomes. The second-most important feature was that the products they purchase be made in the U.S.