Affluent consumers went on a spending spree for luxuries in the second quarter 2007. The typical luxury consumer spent $15,283 buying luxury goods and services during the second quarter, 9 percent more than the average expenditure of $14,024 in the first quarter. This according to the results of Unity Marketing's Luxury Tracking survey of 1,000 affluent consumers conducted at the close of the second quarter 2007 (average income $155,500 and average age 44.3 years).

Industries benefiting from increased luxury consumer's spending included:

* Luxury electronics (average spending rose 14.5 percent); home decor fabrics, wall and window coverings (61.5 percent) ; kitchen appliances (8.4 percent); linens and bedding (11.4 percent) and tabletop (42.5 percent) in the luxury home sector.

* Luxury fashion accessories (28 percent increase); cosmetics and beauty products (33.8 percent); jewelry (54.6 percent) and watches (20.3 percent); and wine and spirits (12 percent) in the personal luxury sector.

* Luxury automobiles (13.8 percent increase); and

* Luxury dining (23.1 percent increase), entertainment (52.9 percent), and travel (21.4 percent), all in the luxury experiences sector.

Luxury Consumption Index Drops by 4 points

While spending went up in the second quarter, luxury consumers' confidence as measured by future spending intent was at its lowest level in over a year. This factored most strongly in the 4 point decline in the Luxury Consumption Index to 96.2 points.

Commenting on this quarter's index, Tom Bodenberg, Unity Marketing's economic forecaster, said, "With spending going up this quarter while confidence went down, this suggests an 'eat, drink and be merry' attitude for now, as these consumers foresee some cloudy patches ahead. The decline in future expectations can be accounted for by uncertainty in the housing market, instability from the increasingly tense Iraqi/Iranian situation, and the continued high price of refined petroleum and uncertainty about the energy supply."

There is a silver lining to the doom-and-gloom forecast for the luxury market and that is the young affluents, aged 40 years old and younger. Pam Danziger, president of Unity Marketing, explains, "The most aggressive future buying lies with the younger, upper-most income segments of the luxury population. As opposed to the older luxury consumers, the young affluents are more likely to see their financial situation improving over the next twelve months which gives them greater confidence to spend more on the luxuries they desire."

"In the second quarter the young affluents also continued their aggressive purchasing of luxuries, spending 39 percent more on average buying luxuries as compared to those over 40 years old. For luxury marketers concerned with their future, the passions and desires of the young affluents -- what I call the 'Want-It-All' generation -- is where they need to focus their marketing planning and strategies," Danziger says.