Spending Patterns of Affluent Consumers

In the wake of the recent recession, consumer spending patterns are being watched very closely by analysts from every industry. One thing that has been observed consistently is that expenditures by affluent consumers have taken over an even larger segment of overall consumer spending (an “affluent” household is generally defined as one with at least $100,000 of disposable income per year).

As opposed to controlling about 25% of all consumer spending before the recession, individuals in the top 5% in regards to net worth now account for about 37% of all consumer spending. Restaurants should be aware of consumer thinking in order to gain the largest possible portion of this spending group.

Changing Attitudes

During the recession, affluent consumers were hit with financial difficulties just like everyone else. They had to reign in their spending and find ways to do without some of the luxuries to which they were accustomed. Spending had decreased across the board and it was no different for those who historically spent more, even in difficult economic times.

Thankfully, in recent months, consumers have become somewhat more optimistic about the economy and relaxed, in part, when it comes to spending. This includes affluent consumers who are gradually loosening their grip on their outgoing cash flow, but still maintaining a sense of frugality that is somewhat novel to that demographic segment.

Affluent Frugality

Although consumers on the higher end of the income spectrum have begun to show more optimism toward the economy, they have not returned to the rate of spending that they exhibited before the recession. One reason for this is that affluent consumers have come to view their newfound thriftiness as something to be proud of rather than something depriving them of luxuries. They have come to enjoy their ability to find the best deals and seek out the highest quality products at the lowest prices. A surprising 64% of affluent households are reported as regularly using coupons, which is an exponentially higher percentage than before the recession.

Also, another reason that affluent consumers may be maintaining their more frugal lifestyles is that cutting back has brought them closer to the things in life that matter more to them: family and friends. Therefore, they feel empowered to make decisions based on their families rather than how they appear when compared to other outside influences. This causes much less importance to be placed on appearing sophisticated which, in turn, causes them to make decisions based on needs rather than wants.

Adapting to Changing Attitudes

For those in the restaurant industry, some of these developments could be discouraging, but there is still good news to be found. Even in the midst of spending patterns that have yet to reach pre-recession levels, there are still ways to profit from the changing attitudes of the new frugal affluent consumer. To find some tips and tricks for gaining a share of the slowly increasing spending of top earners in the country, see the next installment of this blog series: Catering to the New Affluent Consumer.

Tags: affluent consumers, economic changes, Restaurant Management Group, Restaurant Receiverships, Restaurant Turnaround Management, spending habits