Inflation is still high! The consumption behavior of high-income people in the United States has changed dramatically!

It is learned that according to foreign media reports, as inflation continues to rise, high-income American families are turning to retailers such as Walmart and Costco that can offer discounts and offers. On the other hand, due to the aggressive interest rate hikes by the Federal Reserve, American luxury buyers have turned to European consumption, and brands such as LVMH have seen a significant increase in revenue.

1. The continued rise in inflation has increased the pressure on high-income families

According to data from the U.S. Bureau of Labor Statistics, the U.S. CPI rose 8.2% year-on-year in September and 0.4% month-on-month; the core CPI rose 6.6% year-on-year, hitting a 40-year high.

According to the National Retail Federation (NRF), the number of high-income households (those earning more than $75,000) reporting difficulty paying their bills is now twice as high as it was a year ago.

On the other hand, almost two-thirds (65%) of households with incomes over $100,000 are dipping into their savings to buy goods that have seen price increases, and one-third are taking on more credit card debt.

2. Inflation changes the purchasing behavior of high-income households

As inflation continues to rise, high-income Americans are turning to retailers that offer discounts and offers, such as Walmart, Costco, BJ's Wholesale Club and Sam's Club.

About 75% of Walmart’s grocery share gains in the second quarter came from shoppers with household incomes of $100,000 or more, according to data disclosed by Walmart Chief Financial Officer John David Rainey.

It is learned that now, high-income American shoppers are visiting retail stores such as Walmart and Costco more frequently than before to buy cheaper goods and get some additional benefits, such as gasoline discounts offered by Walmart.

3. High-income people continue to buy luxury goods across borders

Despite the rising cost of living, Americans' willingness to buy luxury goods remains as strong as ever. There are signs that Americans are shifting their spending from the United States to Europe as the Federal Reserve's aggressive rate hikes have led to a depreciation of the euro.

According to data from the Wall Street Journal, before the epidemic, Americans had to pay about 13% premium to buy luxury goods domestically, but now, this premium has doubled, which has greatly reduced Americans' interest in buying famous brands domestically.

In the third quarter, European luxury brand Moët Hennessy Louis Vuitton (MVT) reported a 27% year-on-year increase in global revenue, but revenue growth in the United States slowed to 11%, which Chief Financial Officer Jean-Jacques Guiony attributed to more Americans turning to Europe to splurge.

Not only that, Americans' interest in traveling to Europe has also increased significantly. Patrick Quayle, senior vice president of global network planning and alliances at United Airlines, said that the number of people traveling to Europe this summer is 20% higher than the same period in 2019.

Editor ✎ Nicole/

Disclaimer: This article is copyrighted and may not be reproduced without permission.