Wealthy Families Plan To Spend $2,300 on Holiday Gifts

by | Oct 7, 2010 | AARC in the News, Affluence Research, Holiday Spending, Luxury Market & Goods

This is a blog post from The Wall Street Journal (http://online.wsj.com) referencing AARC’s latest research about affluent spending plans for the 2010 holiday season.

Wealthy Families Plan To Spend $2,300 on Holiday Gifts

Originally posted October 6, 2010

http://blogs.wsj.com/wealth/2010/10/06/wealthy-families-plan-to-spend-2300-on-holiday-gifts/

By Robert Frank

By all appearances, the wealthy should be preparing to spend big this holiday season.

The millionaire population is back up. Stocks are well off their lows of 2009. And high-end incomes have held up fairly well – especially compared to the rest of the country.

But a new survey suggests the wealthy are planning to spend less or the same as last year.

The survey, by the American Affluence Research Center, polled 439 people with net worths of $800,000 or more, which represents America’s wealthiest 10%. According to the survey, the group plans to spend an average of $2,370 this holiday season, down from $2,399 last year.

More than two thirds of the respondents plan to spend the same as they did in 2009. Only 3% said they plan to spend more. About 28% plan to spend less. And among those spending less, the average decline was 14.9% from 2009.

A surprising 12% of the group said they’re not buying any gifts this year.

Of course, to most Americans, spending an average of $2,370 on holiday is a lot. But high-end retailers are unlikely to take much cheer in the finding, since so much of our consumer economy is now built on increased spending by the wealthy. The Affluence Center estimates that the top 10% now accounts for half of all consumer spending.

Why are the wealthy holding the line on spending this Christmas?

Ron Kurtz, president of The Kurtz Group, which runs the American Affluence Research Center, cited two main reasons. First, he said the wealthy have taken a hit to their net worths over the past three years and remain cautious. Second, he said they have a gloomy outlook for the future.

“They’re not looking for any improvement as far as household income, and they’re concerned about rising taxes,” he said. “I think there’s a bit of a negative psychological effect when it comes to their spending plans.”

Are you planning on spending more than $2,300 on gifts this holiday season? What will you be buying?