Consumers are increasing their spending in 2010 for the first time in three years. Higher levels of spending were tracked by the government in roughly two-thirds of the 350 categories; most notable is luxury spending. According to the Bureau of Economic Analysis, spending on luxury items such as TVs, jewelry, recreational vehicles, and high-end pet supplies helped consumer spending post a year-over-year increase of 1.4 percent during the first eight months of 2010.
Luxury sales have been fueling much of the spending. TV sales haved increased nearly 35 percent this year. There has been a strong demand for three-dimensional TVs, bigger panels, and high definition. Winnebago has also reportec that have doubled. Sales of pet supplies also have increased and included sales of high-end items such as timed car food dispensers, organic dog food.
Small businesses should watch these trends and consider if and how their inventories might change to better meet these demands.
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