America's millionaires are tightening their belts this holiday season, but most may not even know they're doing it. That's the mixed message of the latest CNBC Millionaire Survey, which polled 750 Americans with investable assets of $1 million or more, excluding real estate.
Nineteen percent of those surveyed said they would spend $500 or less this holiday season, up from 9 percent in 2015. Those spending $500–$1,000 rose from 18 percent to 25 percent, while the number spending $1,000 or more declined from 73 percent in 2015, to 55 percent this year. Spectrem Group conducted the survey for CNBC shortly after the U.S. presidential election in November.
The results generally hold up across income levels and age groups. The number of Democrats saying they would spend $500 or less spiked 17 percentage points year-over-year, compared to an 8-point increase among Republicans. Women were more likely than men to say they were spending less.
"These numbers are very consistent with what we're hearing from the companies that attract these types of consumers," says Hana Ben-Shabat, a partner in the retail practice at management consulting firm A.T. Kearney. "If you just look at the department stores that sell luxury — Nieman Marcus, Nordstrom, Saks — they all reported over the last few months that they are struggling. "
Shares of Nordstrom have tumbled this holiday season, worsened by a downgrade from J.P. Morgan on Dec. 16. "Beware the department store, TV host Jim Cramer cautioned on CNBC's Mad Money Friday, " or at least the department-store stocks. ... If Nordstrom is hurting … they can't be alone."
Despite the numbers on planned spending, most millionaires don't seem to realize they're cutting back. When asked how their 2016 spending compares to 2015, 81 percent of respondents say they're spending the same as they spent a year ago, and only 10 percent say they plan to spend less than they did in 2015. The contradiction could be a sign that many millionaires don't pay careful attention to their holiday budgets.
Ben-Shabat disagrees, saying it's more likely that millionaires are spending less on physical gifts. "What's actually happening is more of the money is going to experiences, and it's a trend that's growing and growing. They probably aren't thinking of experiences when they tell you how much they'll be spending on gifts for the holidays. I don't think it's that these people don't track their spending."
There is one group that is spending more. Fifty percent of respondents with annual household incomes of at least $500,000 said they would spend between $2,500 and $25,000 this season, up from 46 percent in 2015. (The group makes up less than 10 percent of those surveyed.)
The number saying they will spend more than $25,000 this year also increased.
"That's right," says Ben-Shabat. "The uber-luxury consumer is still out there spending. There's good demand for the higher-end product. It's the middle group that's in trouble."
Correction: This story has been updated to reflect that luxury brands are still showing modest growth after adjusting for the impact of currencies and acquisitions.