Rich Folks Looking Askance at Luxuries

There’s an obvious reason why wealthy consumers are cutting back on luxuries: Those people are not as wealthy as they were before the economy tanked. But there’s another reason, says a report by the Luxury Institute: Lots of wealthy people feel the purveyors of luxury goods and services “are failing to deliver on the fundamentals of luxury.”

Polling among people with an average yearly income of $308,000 and average net worth of $3.9 million found 64 percent agreeing that luxury brands are priced too high relative to the value they provide; 58 percent said craftsmanship of luxury goods is on the decline; 44 percent said luxuries are become “commodities.”

Why do the wealthy buy luxury goods? Not to be ostentatious, oh no! Seventy-seven percent said they buy them because such items last longer and “keep their value”; 72 percent said they buy those things “for themselves, not to flaunt their wealth or good taste”; 64 percent buy them because they think “the best” is generally “best for a reason.”

One other tidbit from the polling, fielded in January: while 43 percent of the wealthy respondents said the recession has made them more “budget conscious” in their approach to luxury brands, 12 percent said they’re spending more “because of the abundance of good deals on luxury items.”