Future of Consumer Goods

There’s significant disagreement about what the recession that we just endured/are enduring means for the future of consumer goods. Has the shine come off of luxury goods permanently or will we return to our lavish ways once we can afford to spend again?

Of course there’s evidence on both sides of the argument, with ConAgra releasing survey data that implies the surge they experienced as people ate more meals at home is here to stay, while bellwether stocks of luxury goods—Whole Foods and Nordstrom, among others—reported increases in sales and earnings last quarter. 

My expectation is that they’re both right, at least in part. Although fewer people can afford it, neither luxury nor ostentatiousness are going to die in America. But I think this recession permanently re-calibrated Americans’ perception of value, so that everyone—whether they’re buying premium or private label—expects more from the products they buy.   

My guess is that Whole Foods and Nordstrom are succeeding because they’re good companies  that had strategies to address the economic situation, not because the boom times are back. And because we’re not out of the hole yet, corrections like the one Wall Street is experiencing right now are bound to be lurking around a few more corners.

In the spotlight: Whole Foods revival signals return of premium