The US luxury retail sector, including furniture, home furnishings, apparel, accessories and department stores, continued to show year-over-year improvement in Q3 2010 as consumer confidence slowly restores, according to new American Express data. “Spend Sights Report: Luxury Retail” indicates overall consumer spending increased 12% on furniture and home furnishings when compared to the same quarter last year, as many opted to upgrade their current homes rather than risk the unstable housing market.
Overall spending on furniture and home furnishings has increased for the past six straight months and most notably, 28% in July 2010. Small and large businesses, however, continued to hold back and decreased spending in this category by 2% and 7%, respectively, during Q3 2010.
Total Q3 2010 furniture and home furnishings spending by both consumers and businesses increased by 13%, while transaction volume increased by 10%. Consumers aged 26-45 were responsible for 46% of total spending in this category in Q3 2010.
Approaching Holidays May Have Lowered Q3 Luxury Apparel Spending
After strong increases in March and April 2010, 19% and 21% respectively, luxury apparel spending from May – September 2010 increased by much smaller amounts, showing that consumers and businesses alike possibly tightened their purse strings in preparation for the holiday season.
Consumer spending on apparel and accessories increased by 3% when compared to the same quarter last year, and was responsible for 86.6% of total sales in this category (the remainder being business spending). The frequency of spend by those making four or more purchases in this category decreased 53%.
Females were responsible for 58% of apparel and accessories consumer spending, consistent with the same period last year.
Transaction Size Up, Volume Down
Overall spend in the luxury jewelry category increased just slightly by 3%, and average transaction size edged slightly higher with a 6% increase. Transaction volume for this category decreased by 3% overall.
While overall spending on jewelry had increased dramatically earlier this year, by 18% in March and 17% in April, the category struggled with increases below 6% for the last four consecutive months, and no increase at all in September.
Males were responsible for 71% of consumer jewelry spending and consumers more than 46 years of age were responsible for over half, 54%, of total consumer jewelry spending.
Shoppers younger than 35 years of age made up 25% of total luxury jewelry customers in Q3 2010, just slightly higher than the year prior at 21%.
Dept. Stores Show Mixed Results
Within luxury department stores, overall consumer spending increased 9%. Of those shoppers with four or more transactions in Q3 2009, 24% increased the number of purchases in Q32010. At the same time, 49% of consumers at that frequency level bought less in Q3 2010.
Small and large business spending in department stores increased by 8% and 7%, respectively, but combined, accounted for only 12.3% of total spending in this category. Overall spending in department stores has increased for the past 10 straight months and consistently more than 12% from February and June 2010.
Consumers younger than 35 were responsible for 29% of total consumer department store spending, consistent with the year prior.
Personal Spending Drives Consumer Buying Trends
More than half of adults are planning to spend more (14%) or the same (40%) in 2011 than they did last year, with the majority of that spending focused on themselves, according to results from the January 2011 American Express Spending & Saving Tracker. In terms of where consumers will spend in 2011, top categories include grooming (73%), health/fitness (70%) and clothing for themselves (61%). Categories at the bottom of the list include video game systems and games (34%), jewelry (34%), portable media players (32%), and tablet computers or e-book readers (30%).
About the Data: Data are derived from transactions on the American Express payment network projected to reflect the general population in the industry, consumer and business segments shown. Average consumers are all consumers regardless of spend living in the US. Affluent consumers are the highest spending US consumers living in the most affluent neighborhoods. Small businesses are US businesses with fewer than 100 employees, and large businesses are US businesses with more than 100 employees.