NEW YORK (Reuters) - To offset the U.S. economic slowdown, Neiman Marcus shoppers may be buying fewer items in the retailer’s luxury stores, but they are not trading down to shop at cheaper retailers, its chief executive officer said on Tuesday.
“Even negative changes to the economy will not drive our customers to less prestigious stores. Our customers may pull back, but she won’t pull out and she won’t trade down,” said Burt Tansky, the retailer’s president and chief executive, adding: “Remember, when our customer tightens their belt, it’s generally ostrich or alligator.”
Tansky was speaking in New York City at a conference organized by consulting firm Emanuel Weintraub Associates to address how retailers and manufacturers can keep and gain market share in difficult times.
U.S. retailers have been hit hard by the weakening U.S economy, as shoppers’ ability to spend is being squeezed by high gas prices, rising food costs, a deteriorating housing market, a credit crunch and a weakening job market.
Luxury retailers have been considered somewhat insulated from economic downturns because they cater to higher income shoppers who are less susceptible to fluctuations in gas prices or food costs.
But even high-end retailers like Saks Inc SKS.N and Neiman Marcus have noted that sales have softened as shoppers take a more cautious approach to spending.
Tansky said his customers, seeing the value of their homes or investment portfolios diminish, are taking a more discerning approach to shopping and may not be buying as many items as in the past.
But he added: “They are not going to forgo luxury or quality any time soon, if ever.”
To offset the tough environment, the retailer is watching its expenses, getting rid of “marginal” merchandise that does not sell well, tightly controlling inventory to avoid markdowns and making sure its merchandise is exactly what its customers want to buy.
“This is not a time to become timid or dull,” he said.
The retailer is also trying to sell more items to customers during their store visits.
“Our consumers will always pay a premium if they perceive the products that they buy and services they receive are of the finest and highest quality,” he said.
Editing by Phil Berlowitz
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