How a Recession Made Luxury Goods More Expensive?
In today’s economy, manufacturers are turning to the U.S. for wholesale sources of luxury goods in addition to other high-end products. As our country’s manufacturing base has slowed, so has the purchasing power of consumers. This has translated into lower prices for many items including luxury goods. Although economic conditions in the country have improved somewhat in recent years, there is still reason for concern as jobs and the economy continue to weaken.
One indication of the strength of the American economy is that consumers continue to buy cars. In fact, they now outnumber those who own homes. Automobile sales are up more than 14% over the past year, and industry experts expect that number to increase even more in the coming months.
Americans are also buying fewer clothes. A slowdown in the growth of the clothing industry could mean fewer jeans, t-shirts and other casual wears for the man in your life. Instead, shoppers are choosing heavier garments like coats and sweaters. With less fabric available in light and darker colors, the man’s wardrobe will likely undergo a boost as well.
Luxury goods continue to be among the most popular items purchased by Americans. They account for nearly a fifth of the American economy. Consumers continue to demand the finest luxury goods at reasonable prices. The slowdown in global economic conditions is expected to affect this demand.
When consumers buy luxury goods, retailers must respond with discounts and offers to draw them in. The U.S. market continues to hold steady in spite of an overall decrease in global trade. As the global economy improves, so will the attractiveness of U.S. markets. Consumers will once again flock to stores to purchase their favorite brands.
Another indicator of the strength of the American economy is the popularity of American-made products. As the manufacturing base of the country continues to grow, U.S. companies become the engines of the global economy. Luxury goods manufacturers contribute over ten billion dollars to the American economy. As consumers enjoy the benefits of buying U.S. made products, more retailers will start to see the value in creating more sources of domestically made luxury goods. As more retailers grow their presence in foreign markets, the demand for imported luxury goods will begin to decline.
In an age where everything is becoming automated, the need for manual labor is still important. Automation has allowed people to replace jobs that are eliminated by technology, however many of those tasks still exist. As consumers become more familiar with computers, they will also become interested in purchasing luxury goods that have been created with the assistance of computers. This trend is predicted to continue as computers continue to improve. As the value of these items increases, people will continue to demand them.
The recession has temporarily inconvenienced many businesses, but it is unlikely to affect the growth of the U.S. economy. Lifestyle choices will always drive consumer spending. As retailers adjust to the recession and possible future recessions, they can focus on selling high quality luxury goods to those consumers who have not suffered the same hardships. As the market for luxury goods increases, more retailers will be able to generate profits and reinvest in their businesses.
As the unemployment rate continues to drop, more individuals are returning to school or returning to college. This group of individuals typically has a better paying job than before, but they are leaving the job force for higher paying positions in the corporate world. For many companies, this translates into increased competition for jobs within the company. Luxury goods tend to be much more durable and resistant to damage from a work environment. This means that retailers will have a better chance of attracting individuals who are returning to school or college, as well as those who may have previously worked in a high-paying position and thus be eligible for reduced pricing on luxury goods.
The increased competition that exists between retailers for retail space should also affect the price of luxury goods. Luxury retailers will generally increase their prices in order to attract new customers. As more retailers to open up, the demand for luxury goods increases. As supply increases, so will the price.
The recession has caused many consumers to re-evaluate their spending habits. Many consumers have realized that the money they previously spent on overpriced items is not replenished instantly. Some consumers have decided to live below their means by saving and buying only the necessities. When this happens, people often cut back on other expenditures, such as entertainment and travel. This is causing a crisis for retailers because the cost of goods is not increasing. As a result, luxury goods are increasing in demand and decrease in supply.