Credit crunch fails to deter middle class from buying luxury goods
The global economic chill seems to have done little to keep middle-class shoppers from luxury stores.
Most department stores in Beijing and Shanghai posted record sales during the Christmas and New Year holiday period, and mainland retail sales for the three-day New Year holiday rose 13 per cent year on year, according to the Ministry of Commerce.
In Shanghai, tens of thousands of people packed the big department stores in Nanjing Road, Huaihai Road and Xujiahui, which stayed open until after midnight on New Year's eve in the hope shoppers would loosen their purse strings at the start of the year.
A 15 per cent salary cut forced information technology employee Wu Jiajun , 28, to hunt a little harder for New Year bargains. He said he had spent more than 1,500 yuan (HK$1,704) on clothes during the holiday, though he had budgeted 1,000.
'I didn't plan to spend that much ... but the big discounts were very attractive, he said. 'There were too many people there. Some scrambled for products and some argued.'
Mr Wu spent several hours jostling with crowds in the New World City shopping centre, as holiday discounts ranged from 30 to 70 per cent.
His purchases helped Nanjing Road, the grande dame of Shanghai retail locations, rake in a record 43 million yuan in revenue on New Year's Day, up 24 per cent from the same day last year. The city's 314 top retailers said the sales volume was up 35.6 per cent to 2.17 billion yuan from January 1 to January 3, the highest for a decade, the Shanghai Daily reported.
In Beijing, New Year's Day sales rose 32.7 per cent at shopping malls, 12.2 per cent at supermarkets and 18 per cent at restaurants compared with the year before. These sales numbers followed the slowest monthly growth for retail sales, for the year nationally, in November.
When the staff at Shanghai's Next Age Department Store tallied their take on New Year's Eve, the total came to a record 258 million yuan, up 20 per cent over the same day last year. Operations manager Ding Jie said the store had been a little hesitant about introducing sweeping discounts of around 60 per cent and staying open 18 hours that day.
'At first, we were worried about whether people would spend much this year, but now the facts show that they are still willing to buy things and the promotion was effective,' he said.
Cao Jia , 25, who works for a multinational trading company, spent several thousand yuan on clothes and cosmetics even though the tough economic times meant her employer might not be handing out annual bonuses this year.
She said she would change her spending behaviour if her income declined but would never miss the annual shopping spree because the discounts were so good. 'I think I will become a little bit more rational. I have cancelled my overseas trip this spring festival, and plans to buy luxury goods. But I won't cut spending on daily necessities,' she said.
But there remain some worries about just how long the spree will last.
Amy Yuan, 29, an auditing firm worker, decided to stay home and visit relatives instead of shopping and travelling over the New Year and Lunar New Year holidays. She said she would cut spending as there were many uncertainties about her job. 'This year will be a tougher year for my company,' she said. 'I used to buy famous brand bags, clothing and cosmetics each year, but now I'm cutting all of my expenditure on luxury goods so I can support myself if I lose my job.'
