Luxury Goods & the Pandemic

avatar for shailynn
shailynn
They never tell you what you need to know.
Read a good article the other day about how the cost of luxury goods have skyrocketed due to the pandemic. The reasoning was:

1. Less of these items are being produced

2. People have more money to blow and nothing to spend it on

3. Some of these purchases people had been waiting to make for years or even a lifetime in some cases, and thought “now or never”

Items they want:

1. Watches

2. Wine and liquor - specifically whisky/ey, tequila and scotch

3. Collectible cars

4. Sneakers

Biggest price jumps were in - Rolex watches (specifically Daytonas) / early 90s Ferrari Testarossa

19 comments

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avatar for mark94
mark94
4 years ago
From its low about 13 months ago, the stock market is up 50%•65%. There are plenty of people whose net worth jumped $1Million. Regular people who were regular savers to their 401Ks. Not surprising that they want to buy a $5,000 watch or a $15,000 boat. Many of these people have seen their 401K increase this much in a single day.
avatar for Sgtsnowman
Sgtsnowman
4 years ago
For the watches/liquor/cigars market the Stimulus checks might account for some of that one time splurge. But above that limit it would have to be longer term income effects.
avatar for Icee Loco (asshole)
Icee Loco (asshole)
4 years ago
Prices go up coz businesses panic send want short term profits fearing a bad situation ahead.
avatar for twentyfive
twentyfive
4 years ago
^ Prices go up for many reasons few as simplistic as you think, In the case of this pandemic it’s getting the supply chain up and running with not enough workers or raw materials, that’s going to increase both costs and the amount of time it takes to get the breakfast cereal from the farmers field to the packing house, to the trucker to the supermarket there’s much less greed involved than just the rust needs to get shaken off and the chain needs oil
avatar for skibum609
skibum609
4 years ago
Prices are up because some idiots pumped so much money into the economy and paid people not to work that there are no truckers to move product. Another fail by senile Joe and the non-working party.
avatar for twentyfive
twentyfive
4 years ago
As far as I can tell even though Biden got more money into the system in 2021 the enhanced UI benefits are leftover from Trumps administration in 2020
avatar for mark94
mark94
4 years ago
The enhanced benefits were scheduled to end. Biden’s stimulus bill extended them through September.
avatar for Icee Loco (asshole)
Icee Loco (asshole)
4 years ago
The key to higher prices is maintaining or raising the profit margin. Basically the rich staying rich at our expense
avatar for Randy_Watson
Randy_Watson
4 years ago
then quit buying 300 dollar sneakers 2icee, come to my concert instead. maybe you'll find a drunk concert goer and you can finally have sex and not have to pay for it for the first time.
avatar for jackslash
jackslash
4 years ago
Are strippers luxury goods? They sure cost enough.
avatar for Cashman1234
Cashman1234
4 years ago
Is the Ferrari Testarossa the car they drove in Miami Vice? It must be older dudes - buying those white suits and chains - trying to do their best Crockett and Tubbs impressions!

All those stimulus checks going out - and the government is cutting off the supply of menthols! It’s just wrong! What’s a brother to spend it on? Food for his kids? Lol!
avatar for Tetradon
Tetradon
4 years ago
@ICEE, really cute when you try to throw around finance/accounting terms out of context like that. Do you realize that everyone along the supply chain needs to get paid too? That even at a non-profit, no one works for free?

Re-read @25's post, you might learn something.
avatar for Icee Loco (asshole)
Icee Loco (asshole)
4 years ago
You're just trying to justify price gouging. Businesses can function without it
avatar for Call.Me.Ishmael
Call.Me.Ishmael
4 years ago
I started a business during the pandemic that focused on hand-made (and therefore expensive) products and it was very successful. I claim no prescience with regards to business, though. I was in the middle of launching when COVID transitioned from a big deal overseas to a big deal here in the US. I had no idea if the pandemic was going to cause me to sink or swim. I got lucky. And now that it's winding down, I'm still doing good.

But it's not just luxury stuff. A lot of middle class folks were trapped at home and stressing out. Amazon and other online retailers did well from anxiety purchases. Folks who were teleworking got an effective pay raise via not spending money on things like gas, car maintenance, etc. That money got spent more than saved, I believe.
avatar for gSteph
gSteph
4 years ago
Fortunately I buy none of those things.
avatar for bkkruined
bkkruined
4 years ago
All the explanations of unemployment payments keeping people from working or supply chains shutting down don't explain why the price of 30 year old cars (Ferrari Testassaroni) is skyrocketing.

Prices on parts for my "classic" '72 toyota are skyrocketing also. And I've heard from one of the parts dealers that specialize that orders I've had were backed up not because of anyone getting sick or increased health and safety requirement, but inability to keep up with demand.

An extra $300 a week, for someone who's unemployed, doesn't suddenly make any Ferrari affordable.
avatar for mark94
mark94
4 years ago
So far, 20 states have announced they are ending the supplemental $300 unemployment payment. Effective dates vary but generally around the end of June. That will make for an interesting comparison for states with and without. My bet is we will see a surge in new jobs shortly after the supplement ends. Funny how that works.
avatar for mark94
mark94
4 years ago
Here’s how it’s relevant. Supply and Demand. Supply chains are disrupted across all goods and services because workers are staying home and living off unemployment. That reduces supply which causes higher prices on all goods, including luxury goods.
avatar for bkkruined
bkkruined
4 years ago
How does this supply chain issue impact the price of 30 year old Ferraris or any other collectible car?
While it explains lumber and microchips and new cars...
I doubt it has much to do with Rolex's, perfume, or much of this other designer junk.
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