As Americans continue to grapple with inflation, high-income consumers are still spending on luxuries, according to a new survey by Saks.
The 'Saks Luxury Pulse,' which surveyed 2,137 U.S. adults in May, found that 76% of respondents with household incomes of $200,000 or more indicated spending the same amount or more on luxury retail items in the next three months.
“We continue to pay close attention to the evolving macro environment and the insights from the Saks Luxury Pulse reinforce our perspective on the luxury consumer,” Saks CEO Marc Metrick said in a statement. “The luxury customer remains highly engaged with fashion, and we are confident that our customers will continue to look to Saks when they want to elevate and refresh their everyday style.”
U.S. consumer prices increased at their fastest pace in four decades in June, according to consumer price index (CPI) data. Clothing and apparel prices rose 5.2% year over year while household furnishings and supplies rose 10.2% during that time.
Retail sales rose 1% in June, above expectations. Though overall momentum has slowed, retail sales are still 18% higher than pre-pandemic levels, an economist told Yahoo Finance.
“The last year, we've seen — and so many others have seen — unprecedented levels of consumer engagement and spend," Metrick told Yahoo Finance Live (video above). "So if somebody says they're slowing down, that still might be they're spending at extraordinarily high levels.”
Metrick acknowledged concerns around slowing demand for goods but remained confident in the resilience of high-end consumers.
“Look, we're in the discretionary business,” Metrick said. “So at any point, there are some of our customers have to make a decision on whether they want to spend on luxury goods. And we have to worry about those consumers as the decisions become harder.”
“But the core luxury consumer, so defined as those who have household incomes above $200,000, they don't have to make that decision so deliberately,” he added. “And we think that will hold on with those guys as we push through.”
According to the survey, consumers expressed a broader interest in the luxury wellness and home goods categories. It also found younger millennial and Gen Z consumers were significantly more likely to be planning luxury purchases.
"I think when you look at the younger cohort of consumer, they haven't been through a moment like we're going through," Metrick said. "And we have to be mindful of how they might respond to questions or how they might be thinking about things today and how that's going to affect behavior in the next few months."
Four in 5 respondents also said they would continue shopping online in the next three months. To encourage spending, Saks added a Buy Now, Pay Later feature to its e-commerce experience, allowing shoppers who wouldn't necessarily splurge on luxury goods have the opportunity to do so.
"We're going to stay on strategy," Metrick said. "We're going to deliver amazing service and product. And the consumer is going to be there."
Edwin is a producer for Yahoo Finance. You can follow him on Twitter @Edwin__Roman.