Because of an economic downturn, consumers are now choosing breakfast instead of Tiffany’s.
Luxury brands such as Tiffany & Company, Coach and Saks Fifth Avenue all experienced a stunt in growth this holiday season, according to the New York Times.
In a Jan. 11 press release, Tiffany & Company reported its revenue in the U.S. rose 4 percent since November. However, according to an article in the New York Times, “nearly all of that 4 percent growth can be traced to foreign consumers who capitalized on the weak dollar to buy jewelry.”
Liliana Stern, assistant professor of economics, said this trend of luxury downgrading is not surprising.
“Income hasn’t grown as much as prices,” Stern said. “You’ll probably buy more essentials and put off buying a Coach bag.”
Stern said prices for essentials have gone up, and people are spending a bigger portion of their income on necessities.
“People have to buy gas and food,” she said. “Luxury goods, you can live without.”
This trend resonates throughout retailers of “aspirational” brands, including those in Auburn.
Jo Harper, manager and buyer for Ware Jewelers, said they have felt the effects of the economy, but remain optimistic.
“I can’t say I’ve predicted an increase, but I think we’ll stay even,” Harper said. “We’re hoping our customer service and reputation keep us up.”
One way they will save on spending is to rely more on custom ordering.
“This will probably be more of a special order year,” Harper said. “There will be more customizing, so you know it’s a done deal.”
Despite the rising costs, Harper remains hopeful for her store. She said she hopes customers go away from chains and toward mom and pop stores.
Haley Penny, the owner of Simply Charming in downtown Auburn, said her boutique is affected as much as everyone in retail.
However, she says her store is lucky because of the location and customers.
“Because we’re in a college town, we’re not as hurt as others,” Penny said.
She said students tend to not be as concerned with money and can spend it on clothes.
“If a student has about $500 to spend, they can save it or spend it on clothes.”
Megann Gallagher, a junior in elementary education, said she spends most of her money on food and gas, but she does splurge and buy clothes.
“I try to find clothes that are cute and still reasonably priced,” she said.
Gallagher said she thinks most middle-class people aren’t shopping at high-end stores.
“I wouldn’t consider buying a necklace from Tiffany’s or a Coach purse,” she said. “I would have to plan for it or use Christmas money.”
Steven Caudill, chair of the economics department, said people are probably not going to be buying luxury items because the country is going into a recession.
“If people are going to buy stuff, it will be more meat and potatoes,” Caudill said.
“We’re still being allotted the same amount of money, it just buys less,” Gallagher said.
