Thursday, January 3, 2013

FISCAL CLIFF BAD NEWS FOR LUXURY BRANDS?



According to Luxury Daily's Tricia Carr the US fiscal cliff may reduce aspirational luxury spend.   

Today's article in Luxury Daily  suggests that luxury brands such as L'Oréal, LVMH and Diageo will see a decrease in infrequent low-ticket purchases by aspirational buyers or entry-level level luxury consumers as they start to feel the payroll tax increase and reduce their purchases of beauty, fragrance and spirits categories.  The payroll tax will see an increase from 4.2% to 6.2% for these consumers.

On the other hand true affluent HNW consumer's spending habits are unlikely to change as Chris Ramney president of Affluent Insights in Miami stated in the article

“The tax increase is not a surprise for the affluent, like the stock market, the coming increases were embedded in their 2012 buying habits and consumer confidence reports.”

For more in depth information read here.

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