Recent earnings reports from major retailers suggest that the wealthy, who pulled back their spending the hardest during the financial meltdown last fall, are once again being enticed to open their wallets and going back to higher-end outlets.
"It's a good sign, but we don't see the same across the board," said Richard Hastings, a consumer strategist with Global Hunter Securities LLC.
It's still a far cry from the era of conspicuous consumption. No matter the tax bracket, people are still focused on value and trying to avoid overspending
- whatever that might mean to them.
Luxury chains like Nordstrom Inc. and Bloomingdale's, owned by Macy's Inc., say shoppers are spending again on items like shoes and dresses, but still shopping for lower prices and classic pieces that get a lot of use.
On the other hand, discounters like Wal-Mart Stores Inc. are lowering prices even further to coax their less-well-off shoppers to keep spending. And it's not on anything glamorous. We're talking basics, like food and socks.
Think of it as two different groups as the economy recovers - spenders and savers.
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THE SPENDERS
Luxury department stores like Nordstrom and Saks are starting to get more traffic. Part of the reason is that they've rolled out some merchandise at slightly lower prices, which is helping to keep the affluent from trading down to other stores.
"If they do spend, it's very scrutinized and it's very value-driven," said luxury retail analyst Robert Burke. "And they want items they can wear multiple places."
Other expensive stores like Abercrombie & Fitch are taking the lesson. The preppy clothing seller said Friday it will offer some lower-priced basics and stock up on denim early next year.
Nordstrom's third-quarter profit rose as sales improved compared with last year. Of course, last year marked a sharp drop in luxury spending as the financial crisis deepened.
Shoppers like Patricia Murnane show what's still changed. The 47-year-old risk manager from New York was shopping for black dress slacks Friday at a Nordstrom in Chicago.
She says she goes to more stores now to make sure she's getting the best price. "I used to consider shopping entertainment, but now I don't think it's entertainment," she said.
