Americans Splurge on "Untouchables"; like Hair and Nail Care

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Categories: Trends & Research

As the economy improves, Americans are beginning to splurge again -- but in a small way.  Meals at casual sit-down restaurants, a daily cup of gourmet coffee and personal-care services, such as haircuts, hair colorings, manicures and facials, are among the so-called 'small luxuries' that are trickling back into Americans' budgets as job prospects improve and the economy expands, according to a report released last week by the National Retail Federation's Stores Magazine. Others include department-store purchases, new shoes and even fancy handbags.

In the NRF's survey of more than 5,000 adults in December, approximately 42% called haircuts or hair colorings an 'untouchable' part of their budget in 2010, up from 37% in 2009. The 'untouchability' of manicures and facials also grew by 3 percentage points and 2 percentage points, respectively.

Additionally, about 32% of those surveyed said a casual sit-down meal was a necessary part of their budget, up from 29% in 2009, while department-store purchases' 'untouchability' jumped 4 percentage points last year, according to the NRF. 'As consumers cut back on bigger-ticket items, they typically still 'spoil' themselves with such treatments,' says John Long, retail strategist at Kurt Salmon. 'It makes them feel better about themselves and their appearances even if they can't spring for a new suit or dress.' Americans are coming back to casual sit-down restaurants, such Olive Garden and Applebee's; coffee shops, such as Starbucks and fast-food, but fine-dining restaurants are still under water. Fine dining is considered as expendable in 2010 as in 2009, according to the survey.

'Casual dining is an affordable indulgence. A $12 to $14 price point won't break the bank,' says Darren Tristano, executive vice president at Chicago-based hospitality consultant Technomic. 'As for fine dining, we're all still adopting more frugal spending behavior.'

Tags: retail