The Wealthy Shifts on Luxury, Optimism, & Politics

Excerpted from AdAge “Study:Luxe Loses Luster for Wealthy” by Lucia Moses, October 2, 2008

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Fears about personal finances are bubbling over to America’s richest, says a new survey by American Express Publishing and researcher Harrison Group, whose findings bode ill for the already-softening luxury advertising category.

The survey, conducted Sept. 19-23 among 614 consumers with an annual household income of $100,000-plus—the top 10% of America’s families—asked how the market turmoil was affecting respondents’ spending plans…The vast majority of respondents—83%—said they were waiting for items to go on sale before buying.

Luxury is losing favor with this group; the percentage of people who said a little luxury was important in tough times declined to 50% from 61% in June. “What makes the survey a source of concern is that this top 10% represents over 50% of all retail spending,” Jim Taylor, vice chairman of Harrison Group, said in a statement. “It is affluent consumers who have kept the consumer economy afloat and whose purchasing is critical to the coming holiday season.”

Attitudes among the affluent have worsened throughout the year, with 48% of the country’s richest families saying they were worried about running out of money, up from 35% in April. Sixty percent said they believed the economy was in a recession that would last more than a year, up from 55% in June.

Optimism also is on the downswing. Fifty-five percent of respondents indicated they were optimistic about their future, down from 93% in 2005…

The survey also found that the Republican Party is losing its hold on the wealthy. The percentage of the affluent calling themselves Republicans stood at 34% in September, down from 46% in 2006, the survey showed. An equal percentage said they were independent, up from 19% two years ago…findings suggest that the affluent still favor Republican candidate John McCain for president but that there are enough undecided wealthy voters to tip the scales in favor of Democratic hopeful Barack Obama.

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