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Luxury Spending Set To Rocket; Jewelry Prices Up 57%, Says WaPo June 21, 2021 (0 comments)
Washington, DC—“The post-COVID spending boom has begun and it’s already re-shaping the economy.”
So says this article in the Washington Post’s business section. The rich collectively have about $2.5 trillion to spend and everyone, from retailers to brands to entertainment and travel purveyors, wants a piece of it.
President Biden has stated his goal of rebuilding the U.S. economy “from the bottom up and the middle out,” but data analysis by the Post says the rich will likely jumpstart spending, just like prior recessions. To wit, the Post points out that the top 20% of earners—households with at least $120,000 in income—account for nearly 40% of overall consumer spending, but the bottom 20% of households account for only about 9% of all spending, and most of that goes to necessities.
It’s also no secret that the pandemic recession was largely a low-end one; for the most part, white-collar workers that kept their jobs and logged in from home emerged not only unscathed, but having saved all the money—about $2.5 trillion more than usual—they would have otherwise spent if they’d been able to go out. And as stocks and home values soared, well-off Americans got even richer.
While increasing disparity between the haves and the have-nots is both a political and economic worry in Washington, companies with product and services to sell are taking Willie Sutton’s proverbial advice and going where the money is.
The Post article points to midmarket retailers like J. Crew and fast-fashion brand Uniqlo introducing higher-end products, and luxury brands like Louis Vuitton and Gucci experiencing a “tsunami” of shoppers. (Editor’s note: both Louis Vuitton and Gucci have shops at the King of Prussia Mall in suburban Philadelphia, and both shops have lengthy lines waiting to get in at almost any hour of the day.) So are entry-luxury brands looking to cash in, says the article: apparel label Lafayette 148 moved further upscale and sales are up 30%.
Meanwhile, the Post quotes Kayla Marci of retail data firm EDITED saying that high-end jewelry prices have risen 57% in a year, from an average of $1,500 in 2020 to $2,360 this year.