The well heeled keep on spending

Despite local retailers' comments about a slowdown in consumer spending and warnings from the market that recent growth figures are a thing of the past, high-end consumers cannot get enough of the good things in life.

Caron Koonin, owner of top end outlet The Wish Collection in Illovo, said yesterday that the company was battling to keep up with demand for its luxury branded products.

And top end liquor store Norman Goodfellows co-owner Carrie Adams said several customers were splashing out on quality alcohol. She said sales of luxury items started to grow about two years ago, and continue to grow.

However, Ipsos Markinor's latest Socio-Political Trends survey indicated that 64% of South Africans believe that many people are living beyond their means and are spending more money than they are earning.

The survey showed 39% of South Africans indicated that they tended to spend money they do not really have, while only 24% supported the idea that higher interest rates would tighten the belt on consumer spending.

Exactly the opposite effect to that intended

Chris Gilmour, an analyst with Absa Asset Management Private Clients, said higher interest rates, far from slowing spending by opulent South Africans, actually increased their wealth.

People at the top end of the market, without encumbered assets, could afford to splash out on luxury items. However, this segment accounts for less than 5% of South Africans.

Adams said the liquor store served a niche market that had a discerning palate.

Norman Goodfellows' customers included people who would splash out for a once-off event, such as a wedding, but it was also benefiting from an emerging middle and upper class.

Koonin said the luxury brand store could not keep up with demand. Yesterday, the store had only two items of linen.

The outlet, a division of Cazzi Collection, stocks a range of luxury brands, spanning homeware, clothing and grooming. Some of the iconic brands include Italian bed linen company Frette, with linen sets starting at R20000, and the French crystal Baccarat.

Koonin said the company specialised in importing the world's top brands, and response for the multibrand collection had been phenomenal.

Some customers were forking out cash for numerous items without even being completely familiar with the product they were buying, she said.

Source: Business Day

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