By Muralikumar Anantharaman
BOSTON (Reuters) - Wealthy Americans are rubbing shoulders with the masses in low-end retailers such as Costco Wholesale (COST.O: Quote, Profile, Research, Stock Buzz) as the financial crisis forces cutbacks in discretionary spending, an analyst said.
"The shame in shopping on discount is no longer there," Jim Taylor, vice chairman of Harrison Group, a Connecticut-based marketing and research consulting firm, told the Reuters Wealth Management Summit.
Although the trend had emerged earlier, the financial crisis is accelerating it, Taylor said. Discount stores like Costco or the Sam's Club unit of Wal-Mart Stores Inc (WMT.N: Quote, Profile, Research, Stock Buzz) are also offering deals to attract the affluent, he added.
Dresses by Palm Beach designer Lilly Pulitzer for small girls, for example, were sold by Costco in May for $23 each against the regular price of $68, Taylor said. And Wuesthoff knife sets went for $129 each against their normal price of $400, he added.
"Every time a wealthy person goes into Costco, there's something there that attracts their attention," Taylor said.
The affluent are also buying more online, where prices can be as much as 30 percent off sticker prices, he said.
He cited figures in a survey by the Harrison Group and American Express Publishing that show the wealthy cutting back on discretionary spending, a trend that dovetails with recent falls in sales at some of the nation's best-known retailers.
The study forecast that affluent American families, with at least $100,000 a year in disposable income, will cut holiday spending by 6 percent this year from last year.
The September 19-23 Internet survey of 614 affluent consumers, who make up 10 percent of American families, estimated total holiday gift spending by that group would be about $22 billion.
Taylor said the numbers would look worse if the study were conducted in October. "This could be a very tough Christmas," he said.
(Editing by Jason Szep, Richard Chang)
© Thomson Reuters 2009. All rights reserved.
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