Trading Up Market Worth $720 Billion

The US trading-up industry where consumers are willing to pay a higher price for a more premium product or service has risen by 7% from 2005 to reach $720 billion last year. Overall, the trading-up market accounted for 21% of the $3.5 trillion that Americans spent on the sectors shown on the chart below, compared to 20% of total spend in 2005, and 18% in 2004. In the UK, Ledbury has found from surveying its Millionaire panel that the category most millionaires were likely to trade up in was cars.

Meanwhile, the trading-down market, where consumers are willing to pay less for a more budget good or service has also expanded by 9% to $1.2 trillion last year. In fact, the only sector of the market to register a decline was the middle-market, which although is still the biggest of the three, shrank from 48% of total spend in 2005 to 46% last year (see High Net Worth Sep 05, Boston Consulting Group).