Mature LA and Young NY Consumers Spend on Fashion

September 7, 2011

amex-la-fashion-sep-2011.JPGMature consumers in Los Angeles and young consumers in New York City increased their year-over-year fashion spending in Q2 2011, according to [pdf] a study from American Express Business Insights. Data from “Q2 2011 Spend Sights Report Regional” also found young Chicago consumers driving an increase in dining out spending, young affluent Miami consumers spending more in most categories, and San Francisco consumers spending more on lodging.

Older, Wealthier Consumers Drive LA Fashion Boom

Mature affluent (56 and older with annual household income of $90,000 or more) consumers in Los Angeles boosted fashion spend in Q2 by an impressive 25%. While transactions per shopper for this group declined 2%, average transaction size increased 31%, indicating that larger, but less frequent purchases dominated the fashion spending patterns of Los Angeles’ mature affluent consumers.
In addition, businesses increased fashion spend 12%, middle moderates (age 31-55 with annual household income of $50,000-$89,000) increased it 6% and middle affluents grew fashion spend 4%.

LA Shows Mixed Spend in Other Categories

Meanwhile, lodging spend was mixed across Los Angeles consumer segments as mature moderates decreased spending by 8%, while mature affluents increased spending by 17%. Young adult (18-30) affluents followed their more mature counterparts and increased spend on accommodations by 4%.

Although most consumer groups decreased restaurant spending in Q2, both young adult affluents and young adult moderates increased spending in this category by 5% and 3%, respectively. In addition, businesses and young adult affluents were the only two customer groups to increase spending in the housewares & furniture category, by 7% and 5%, respectively.

Young New Yorkers Spring for Big Ticket Fashion

amex-ny-fashion-sep-2011.JPGWhile young adult affluents and young adult moderates in New York City increased Q2 fashion spend by 5% and 3%, respectively, the average transaction size for these two groups increased by 13% and 10%. This trend rang true for most consumer groups as well, as overall transactions per shopper in New York City were down 2%, but average transaction size increased 8% overall.

Young Affluent New Yorkers Spend More

Young adult affluents in New York led lodging spend with a 16% increase, while businesses and young adult moderates increased spending by a more modest 7% each. Mature moderates decreased spending in the restaurant category by 6%, contrary to their young adult counterparts, who increased spending by 9% in the same category.

Young adult affluents were also the only consumer group to increase spending on consumables, such as groceries, with a 6% uptick.

Young Chicagoans Eat Out

amex-chicago-restaurant-sep-2011.JPGRestaurant spending was down or flat for most consumer groups in Chicago, but young adult affluents increased spend by 11%, and young adult moderates spent 3% more in this category than last year. Young adult affluents’ average dining transaction size increased 6%, compared to the overall transaction size for all consumer groups decreasing 1%. Of those Chicagoans spending less on eating out, mature moderates had the most dramatic decline in spend at 5%.

Chicago Affluents Increase Housewares Transaction Sizes

In the housewares & furniture category, young adult affluents in Chicago increased spend the most, by 9%, while middle moderates had the highest decrease at 5%. Notably, the affluent groups all increased transaction size for this category in Q2: young adults by 4%, middles by 8%, and matures by 8%.

Businesses increased spend by 10% in lodging, while mature affluents decreased spend by 9% in the same category. Young adult affluents followed their older counterparts and decreased spend on lodging by 7%.

Fashion spend was down overall by Chicagoans, with middle moderates’ spend down by 7% and both mature moderate and affluent groups’ spend down by 5%.

Young Affluent Miami Consumers Live It Up

amex-miami-youth-sep-20111.JPGMiami’s young adult affluents increased spending across all categories, with the exception of housewares & furniture, which American Express says indicates they are not quite ready to invest in their homes. This group grew spending more than any other in the lodging category, increasing by a substantial 51%. These young adult affluents also increased spend on restaurants by 15%, and in both the fashion and consumables categories by 2%.

Young Moderate Miami Consumers Increase Some Spending

Trailing young adult affluents, Miami’s young adult moderates increased lodging spend by 25%, but the other affluent groups did not even come close in the same category (middle affluents, 9%; mature affluents, 3%). Young adult moderates also increased spending by 15% in the restaurant category, while middle affluents followed close behind, at 10%.

Middle affluents led spend increases in the fashion category, at 12%, while mature affluent spending remained unchanged in Q2 compared to last year.

Golden Gate Residents Get Out of Town

amex-sanfran-lodging-sep-2011.JPGAll San Francisco consumer groups increased spending on lodging during Q2, led by a large increase of 15% by both businesses and young adult moderates. Young adult affluents also increased spending by an impressive 12%, while middle moderates followed close behind with a 6% increase. The mature moderate and middle affluent groups also contributed to spend growth across the board, by 3% and 4%, respectively.

Affluent Young San Franciscans Boost Expenses

Young adult affluents in San Francisco increased restaurant spending by 12%, while spending by mature affluents in the same category remained unchanged. Both moderate and affluent young adult groups increased housewares & furniture spending by 21% in Q2.
Middle affluents and young adult affluents both increased spending on fashion by 6%, while the mature affluent segment decreased spending by 4% in the same category.

BIGresearch: Half of Consumers to Consider Purchases More Carefully

Half of US consumers plan to try to consider each purchase more carefully during the next five years, according to a July 2011 survey from BIGresearch. Data from the Consumer Intentions & Actions Survey indicates about 48% will also try to stick to a budget and be more price-conscious when buying clothing and food.

More than four in 10 consumers (about 47%) also plan to spend less dining out in the next five years. Only about 12% say they economy won’t impact their lifestyle.

About the Data: American Express Business Insights examined US consumer and business spending patterns at thousands of merchants in Chicago, Los Angeles, Miami, New York City, and San Francisco. The data shown in the Spend Sights reports are derived from transactions on the American Express payment network projected to reflect the general population in the industry, consumer and business segments shown. The data do not represent American Express’s own performance in the industry segments shown and do not represent the spending behavior of American Express Cardmembers overall or in any particular cardmember segment.


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