Affluent shoppers often have an outsized impact on shifts in consumer spending because they have money to splurge when times are good but are quicker than the wealthy to pull back when feeling pressured. So a hit to the brands, retailers and shopping malls that cater to richer Americans foreshadows potential weakness ahead for the US economy.

As a proxy for high-income spending, Bloomberg created an affluence index(2) of 30 large retailers and brands across 10 categories — spanning clothing, jewelry and electronics — with average transaction values above their peer group.

All the companies in the index surpassed an average of $100 per purchase in October, save for makeup and skin-care sellers SephoraL’Occitane. Some retailers, including Apple ($267) and West Elm ($292), far exceeded that. Most are popular holiday-shopping destinations, including Best Buy, Williams-Sonoma.

The retailers and brands in the index experienced a deterioration in sales since January that recently deepened, according to Bloomberg Second Measure, which tracks anonymous US credit- and debit-card transactions. Sales for the three-month period from August to October declined at 70% of the companies. The median change in sales(3) reflected a 14% drop — the worst performance in two years. The few brands to defy the trend were the likes of Ugg, which Vogue

Julie Robinson-Jasper, 54, whose Seattle household earns more than $100,000 a year, is already planning to keep holiday spending tight. She’s capped gifts for her two kids at $600 — the same amount as the past three years, but with considerably less buying power after rapid inflation. The family is mostly eating at home to avoid higher prices at restaurants and turning to the resale market for clothing.

“We don’t want to be caught with our pants down if something were to happen again, like a layoff or an illness,” says Robinson-Jasper, who works for a plant nursery.

Foot traffic at shopping malls that serve higher-income areas are also starting to decline for the first time since the pandemic, according to an analysis of Placer.ai mobility data(4) for top shopping centers in 25 states. In October, 21 of the 25 shopping destinations analyzed — spanning Birmingham, Alabama, to Garden City, New York, and Bellevue, Washington — posted declines in foot traffic. Overall visits sank 3.3% for the latest three-month period, the worst performance since early 2021.

The softness extends to areas that have gained population post pandemic. On the outskirts of booming Houston, where household income is 20% higher than in Texas overall, the Baybrook Mall saw foot traffic drop by 660,000 visits this year, or about 6%, according to Placer.ai, which analyzes mobile-phone location data.(5)

“Everybody is kind of in window-shopping behavior right now,” says Bre Clinton, an assistant manager for the Body Shop at Baybrook Mall. “They don’t have many bags in their hands.”

Clinton, 25 years old, says holiday shopping is off to a slow start, with cheaper items like mini sizes of body scrubs selling better than pricier options. To attract shoppers, she says, the store is giving away more trial sizes of lotion.

A spokeswoman for Brookfield Properties, owner of the Baybrook Mall, said that retail sales at the shopping center were up in the 12 months through September and the firm is “thrilled” with its performance.

The slowdown at malls and retailers serving the upper middle class contrasts with the headline US retail

But years of high inflation and rising interest rates have soured the moods of some consumers. While the job market has remained strong, real incomes have had periods of decline, with parts of the upper middle class taking a bigger hit.

The median income for US households led by someone with a college degree fell 4.9% to $118,000 in 2022 — twice the rate of decline for all earners, according to Census Bureau data. Only

Spending patterns among the upper middle class often reflect how they feel about their wealth, which is strongly tied to the value of their homes. In several major markets, property prices have been falling.

Richer Americans are increasingly worried about their jobs and are opting to pay off debt after they splurged on summer travel, Bruun says.

Already, shoppers are pulling back on big-ticket items like washing machines, Botox and even teeth straightening. Buying on credit has become more expensive after the Federal Reserve significantly raised interest rates to curb inflation, weighing on sales of Harley-Davidson

Customers are “sitting on the sidelines,” Edel O’Sullivan, chief commercial officer of Harley-Davidson, told analysts last month. “Just putting this level of a discretionary purchase to the side in 2023.”

Likewise, Revolve

“Aspirational luxury consumers who were flush with cash 18 months ago just don’t have the same capacity to spend,” he said.

(1) Bloomberg Second Measure data is based on debit/credit card transactions from US consumers. Excludes cash, checks, gift cards and some buy-now-pay-later services. Data for brands, such as Nike, Apple and Coach, is from their retail divisions (stores and e-commerce). Sales at wholesale partners, such as department stores, are not included in the brand’s data.

(5) Placer.ai uses anonymous mobile phone data to estimate foot traffic.