High-End Consumers Grow Cautious And Moody
High-end consumers are still shopping, but they are doing so with caution, according to some executives from high-end retail and recreational business companies.
Bill Taubman, chief operating officer of upscale mall operator Taubman Centers, said he sees the high-end consumer experiencing “mood swings.”
“It’s not so much about gas prices and the rebates checks. That’s had no impact on our business,” Taubman said. “On the other hand, I think the mood of the consumer is not great.”
He said the traffic in Taubman Centers malls, which tend to target high-end consumers, is not as heavy as it once was, but the consumers are spending more money when they shop.
One factor helping Taubman's business is the weak dollar. Many of Taubman's shopping malls are located areas visited by international tourists, which has helped the malls offset some of the weak traffic.
"Those markets continue to see an influx of international tourists," he said.
-Bill Taubman, Chief Operating Officer of Taubman Centers
High-End Consumers Responding to Sales
The high-end consumer maintains their shopping habits in periods of economic weakness, but they tend to respond more to promotional sales, said Saks CEO Steve Sadove.
“You’ve got consumers at the wealthy end, they are being cautious," he said. "They are being drawn in much more by promotions, they are reacting when we are giving them deals."
Sales have been steady and slightly increasing, he said.
Sales in Saks stores open at least 12 months were rose 8 percent in April and May, he said.
It is the “aspirational consumers” who are really struggling.
“The consumer is 70 percent of the GDP, and the consumer is going to ultimately be what bails us out,” he said. “We have been through this before and it will come back.”
-Steve Sadove, Saks CEO
Call it the golf ball indicator.
George Fellows, president and CEO of Callaway Golf said although he is seeing his business hold up "reasonably well" in the weak economic climate, he is cautious and expects to see the sale of golf balls down before the end of the year.
“This year has been sort of a perfect storm," Fellows said. "Half the country is under water - and that together with gas prices and the economy - (golf) rounds are down...You would expect balls would follow that to some degree.”
The severe weather is the major reason rounds have decreased at private courses, not the economic situation, Fellows said.
-George Fellows, president and CEO of Callaway Golf