Even though the economy is improving, the wealthy aren't trading in Costco and Target for Tiffany's and Gucci, according to a couple of surveys on spending by the ultrarich. But that doesn't mean they'll tighten their belts. It just means they'll spend their money in different ways.
In a survey of 500 consumers with a net worth of at least $5 million, respondents say they expect to cut back on spending in the second half of the year, except when it comes to travel and fine dining. The survey, conducted by Luxury Institute, found that products such as expensive jewelry and handbags hold less significance today for 80 percent of the respondents. Instead, they'll put more money toward products and experiences that have more intangible value to them, such as fine wine and travel.
"They are definitely going to the 'experiential' categories," Milton Pedraza, president of Luxury Institute, said in a release. "Travel is healthy, technology is healthy."
Survey respondents say that many luxury items such as expensive handbags and watches are becoming too common and that they don't deliver extra value for the high price.
Another reason luxury brands may see fewer shoppers: China. A study on global luxury spending by Bain & Co. predicted growth of only 4 percent to 5 percent this year, compared with 10 percent last year.
Although the U.S. and Latin America are expected to post stronger spending, overall spending will be dragged down by consumers in Europe and especially China, which will restrain its luxury buying sprees, Bain & Co. partner Claudia D'Arpizio told CNBC.
China's culture of giving gifts -- especially watches -- has been dampened by the government's crackdown on corruption, according to the report, while Europe is still suffering a weak economy.
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