A10 From Page One christmas from A1
households, buoying their confi- dence in the economy along with their ability — and their desire — to spend. Meanwhile, progress largely has bypassed poorer families who remain hamstrung by anemic wage growth and a higher unemploy- ment rate. This tale of two Christmases
is being played out from the shopping mall to the kitchen table. At Towson Town Center outside Baltimore, sales are ex- ceeding expectations in the mall’s new wing of luxury retail- ers such as Burberry, Louis Vuit- ton and Tiffany’s, executives said. But Miriam Pap of Balti- more City has never stepped inside those stores, even though she often works a few feet away, selling Auntie Anne’s pretzels at a small cart at the entrance to the hallway. “We don’t have the money,”
Pap said on a recent afternoon, as she served up samples of cinnamon raisin to shoppers juggling Nordstrom bags and baby strollers. Pap, 24, said she does plan to
spend more this holiday season — only for bills, not on gifts for her daughter in Guatemala and definitely not on shopping for herself. Food, gas, even dry- cleaning seems to be more ex- pensive, she said. This Christ- mas, she plans to work and feels lucky to do so. “Here is job, job, job,” she said. While it has always been the
case that lower-income families find themselves financially strapped more often than wealthy ones, the Great Reces- sion was also a great equalizer. Wall Street bankers and con- struction workers alike got laid off. The fallout in subprime mortgages quickly spread throughout the real estate mar- ket. And consumers at all in- come levels slashed spending, whether that meant abstaining from designer shoes or trading down from beef to chicken. The damage to shoppers’ wal-
lets was much broader than in previous generations, when the wealthy remained insulated from the nation’s economic cy- cles. In recent decades, as the gulf between the incomes of the
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SUNDAY, DECEMBER 12, 2010 Christmas ‘polarized’ as the poorer bypass the malls
Consumption shiſts toward the affluent
Spending of high-income families constitutes a growing portion of total spending, while lower-income families are spending less.
BY AVERAGE HOUSEHOLD INCOME Share of total consumption
33%
$100,000+ 35%
38%
34%
$50,000-100,000 34%
33%
33% PHOTOS BY ASTRID RIECKEN/FOR THE WASHINGTON POST Shoppers at Towson Town Center outside Baltimore roam the newluxury wing with LouisVuitton,MichaelKors and Tiffany’s stores.
wealthy and the rest of Ameri- cans has widened, affluent fami- lies experience greater income loss during downturns but see an even bigger spike on the way back up, aNorthwesternUniver- sity study found. The divide is evident in retail-
ers’ sales. Sales at luxury stores open at least a year — a key measure of retail health — plunged by amonthly average of 9 percent last year, only to skyrocket 7 percent so far this year, according to industry anal- ysis. Discount stores eked out a 0.5 percent gain a year ago and are up just 2.6 percent this year. “During the recession, it was
very unfashionable to be fash- ionable and that is slowly chang- ing,” said Stephanie Brager, vice president for assetmanagement at General Growth, which owns the Towson mall and Tysons Galleria. That is not to say that luxury
consumers have abandoned the lessons of the recession. Coach, for example, reported that sales in North America grew by dou- ble digits during its most recent
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takes as a hopeful sign. And as a retail industry veteran, Reyn- olds said, she understood that “the more we shop, the better it is.”
Economists say the biggest
Antonio Rodriguez of Towson, Md., andMiriam Pap of Baltimore work at Auntie Anne’s pretzel store at Towson Town Center.
quarter — but only after it lowered prices of its signature handbags and leather goods by 10 percent. Still, the company said customers’ plans to buy in the future were at the highest level in two years. “I honestly think people are
tired of the recession,” said Pau- la Reynolds, 56, a photographer who was holiday shopping at Towson on a recent afternoon. “I
think people are ready to move on, but I think they’re being cautious.” Reynolds bought clothes for
her son at the Gap, two skirts for herself at Ann Taylor and nosed around Tiffany’s for a new wedding ring for her hus- band, who lost his while surfing in the Pacific Ocean. She said more people are calling to buy her high-end prints, which she
obstacle to a robust recovery is the high unemployment rate, which has hit workers with little education and low household income the hardest. The jobless rate for workers without a high school diploma is 15.7 percent— well above the national average and triple the rate for college graduates, according to govern- ment data. Meanwhile, the un- employment rate among house- holds that had been making less than $50,000 is 15 percent, well above the national average of 9.8 percent, according to consulting firm Bain & Co. These are the forces working
against 27-year-old Chanise Lee of the District, who holds a high school diploma and has been looking for work for three months after losing her job at a nursing home when the owner went bankrupt. “It doesn’t feel like I’m out of
2006
SOURCE: Bain Macro Trends Group
2008 (forecast) THE WASHINGTON POST
the recession,” she said. “I couldn’t say what we need to do with the economy, but I know I need employment.” Lee visits the nonprofit Dress
for Success almost every day while her kids are at school for help sprucing up her resume and finding business clothes for interviews. She has applied for about 50 jobs and secured four callbacks — including one last week for a position as a hotel concierge — but she is worried that nothing will materialize before the holidays are over. Her game plan for Christmas
Day is to distract her three young children with coloring sheets and a hearty breakfast when they wake up so they don’t notice how few gifts are under the tree. “By the time all of that’s done,
then the toys are not as exciting,” Lee said. “I kinda take their focus away from the presents and back towhere it needs to be.”
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