The Wall Street Journal
The recession whet wealthy Americans' appetite for fast food, a habit that is sticking even as the U.S. economy embarks on a slow recovery.
A new American Express study found that "ultra-affluent" consumers boosted their fast-food spending by 24% in the second quarter, compared with the year-earlier period, while fast-food spending among the rest of U.S. consumers rose 8%.
Wealthy consumers increased their spending on fine dining, too, but not by as much, suggesting that although the economy has shown signs of improvement, the wealthy are trying to hold down costs in certain areas.
"We're seeing a bifurcated behavior pattern, with a lot of affluent consumers still trying to be frugal where they can by spending at quick-service restaurants and discount retailers, but we're also seeing a return to higher-end spending on air travel and luxury items," said Ed Jay, senior vice president of American Express Business Insights, which studied spending patterns among its cardholders.
American Express defines ultra-affluent consumers as those who charge $7,000 or more a month on their cards, and meet certain income criteria.
The ultra-affluent increased their spending on business-class plane tickets by 114% in the second quarter, compared with a year earlier. Rich consumers also boosted spending on cruises, car rentals and luxury hotels. They spent 12% more on fine dining.
For Keith Gutsell, an information-technology risk manager at Northern Trust Bank in Chicago who charges several thousand dollars a month on his credit card and always pays it off, eating at fast-food restaurants helps him feel as if he is being frugal.
A new American Express study found that "ultra-affluent" consumers boosted their fast-food spending by 24% in the second quarter, compared with the year-earlier period, while fast-food spending among the rest of U.S. consumers rose 8%.
Wealthy consumers increased their spending on fine dining, too, but not by as much, suggesting that although the economy has shown signs of improvement, the wealthy are trying to hold down costs in certain areas.
"We're seeing a bifurcated behavior pattern, with a lot of affluent consumers still trying to be frugal where they can by spending at quick-service restaurants and discount retailers, but we're also seeing a return to higher-end spending on air travel and luxury items," said Ed Jay, senior vice president of American Express Business Insights, which studied spending patterns among its cardholders.
American Express defines ultra-affluent consumers as those who charge $7,000 or more a month on their cards, and meet certain income criteria.
The ultra-affluent increased their spending on business-class plane tickets by 114% in the second quarter, compared with a year earlier. Rich consumers also boosted spending on cruises, car rentals and luxury hotels. They spent 12% more on fine dining.
For Keith Gutsell, an information-technology risk manager at Northern Trust Bank in Chicago who charges several thousand dollars a month on his credit card and always pays it off, eating at fast-food restaurants helps him feel as if he is being frugal.
"Subconsciously, I think I'm saving money by spending less on food, but my spending somewhere else must be going up, because the amount on my credit card is not going down," said Mr. Gutsell, 41 years old, as he polished off an Extra Value Meal at a McDonald's in Chicago's financial district on Tuesday.
Fast-food restaurants have fared better than mid-price and fine-dining establishments during the recession, but times are still tough for most chains. Visits to fast-food chains fell 2% during the year ended July 31, according to market-research firm NPD Group Inc., compared with drops of 3% for mid-price restaurants and 8% for fine restaurants.
McDonald's Corp., which has performed well during the downturn, in the U.S. has "seen increased visits and spending across all demographics…in the second quarter of this year, versus the second quarter of last year," spokeswoman Danya Proud said.
Wealthy consumers also are ordering more pizza from Domino's Pizza Inc. stores, a trend the company attributes, in part, to new pizza recipes.
"While we were up with all consumer groups, we did see somewhat stronger results with consumers who are more affluent and have higher education levels," Domino's Chief Executive Patrick Doyle said in an interview.
Fast-food restaurants have fared better than mid-price and fine-dining establishments during the recession, but times are still tough for most chains. Visits to fast-food chains fell 2% during the year ended July 31, according to market-research firm NPD Group Inc., compared with drops of 3% for mid-price restaurants and 8% for fine restaurants.
McDonald's Corp., which has performed well during the downturn, in the U.S. has "seen increased visits and spending across all demographics…in the second quarter of this year, versus the second quarter of last year," spokeswoman Danya Proud said.
Wealthy consumers also are ordering more pizza from Domino's Pizza Inc. stores, a trend the company attributes, in part, to new pizza recipes.
"While we were up with all consumer groups, we did see somewhat stronger results with consumers who are more affluent and have higher education levels," Domino's Chief Executive Patrick Doyle said in an interview.
