Affluent shoppers are splurging on new outfits at Macy’s, Nordstrom and other high-end outlets, while lower-income shoppers are opting out of discretionary items, according to major retailers.
“As macroeconomic pressures on consumer spending increased during the quarter, our customers continued to shop,” Macy’s CEO Jeffrey Gennette said in a press release.
Macy’s has seen a “noticeable shift” in consumers buying clothes for special events and shopping in stores, Gennette said. Dresses, women’s shoes, accessories and men’s bespoke clothing recorded strong sales in the quarter.
“Sales of luxury goods have remained outstanding for our business, as the buying behavior of high-income consumers has so far remained less affected by inflation,” he said on a call. with analysts. “The client whose annual income is less than $75,000 has been the most affected. »
Macy’s raised its forecast for the year, pushing its stock up 12% in early trading Thursday.
“Customers refreshed their wardrobes for occasions such as social events, travel and returning to the office,” Nordstrom said. The department store industry has struggled in recent years, but Macy’s and Nordstrom are benefiting from wealthier consumers making discretionary purchases.
Luxury goods and apparel brands also capitalized on spending by high-income shoppers.
But there’s a divide in buying behavior that goes along with the economy, some companies say. Federal stimulus spending has ended and inflation has risen at the fastest rate in decades, leading low-income consumers to change their buying habits.
The companies say lower-income shoppers are slowing down their spending on discretionary items, buying cheaper private label and adding fewer items to their carts.