Luxury spending cools, but travel remains hot: Saks Fifth Avenue

BUsINEss

from Lisa Fickenscher

March 6, 2023 | 5:26 p.m

Higher prices driven by inflation are starting to hurt Saks Fifth Avenue’s affluent shoppers, according to the retailer’s new survey.

About 62% of Saks customers said they plan to spend the same amount or more on luxury goods over the next few months, up from 68% in September when the company conducted its periodic Saks Luxury Pulse.

“We’re coming off a couple of years of misguided growth, and I think we’re in for a little bit of turbulence,” Saks.com Chief Executive Marc Metrick told The Post. “We saw it coming at the end of last year and we’re experiencing it now.”

The survey of 2,832 US-based shoppers over the age of 18, conducted between January 13 and 17, also showed that shoppers are prioritizing their spare cash for travel, followed by events and activities, and lastly clothing.

About 72% of Saks customers have already booked or are planning to book a trip, with warm-weather destinations topping the getaways, according to the survey.

Holiday spending is driving the luxury retailer and website traffic has been “strong,” but converting browsers to buyers “isn’t where we want it to be,” Metrick said.

He said shoppers are becoming “more intentional and shopping longer.”

Of those earning $200,000 or more, about 68% plan to spend the same or more on luxury items, up from 70% in September, according to the survey.

Some 58% of shoppers making between $100,000 and $199,000 plan to spend the same or more on luxury this spring, up from 66% in September.

Meanwhile, 55% of those making less than $100,000 plan to spend the same, up from 61%.

Saks uses the index as a signal of consumer sentiment to determine which services customers value.

“We really like store returns, and we’ve gone out of our way with our Saks Fifth Avenue stores” to accommodate shoppers who bought something online and want to return it to a brick-and-mortar store. There are separate return desks designated for online returns, Metrick said.

Last month, Neiman Marcus eliminated its in-store return desks, The Post reported, as part of a layoff of nearly 5% of its workforce.