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Exactly Who Are the Affluents?

In our last December 2014 white paper The Perfect Storm: LBE Disruption & Opportunity, we discussed how the upper middle and higher income households, what are called the Affluents that make up more than 20% of all households, are growing and control the majority of location-based entertainment spending. In the White Paper we described Affluents as people with personal incomes in excess of $70,000 who predominately live in households with two or more income earners with total household incomes of $100,000 or greater. We used that simple definition for brevity. However it is really more complicated than that, as household size has an impact of how much money it takes to live comfortably. A four-member household needs more income than a two-member household.

Pew Research just completed an analysis of who the upper-middle and higher income households are, what they call upper-income. They found that 21% of households had upper incomes and 46% had middle incomes in 2013. Here are their findings of what families are upper-income:

Upper Income graphicThis corresponds very closely with an analysis early this year by USA Today of what 2014 income the average family of four needs to live the American Dream.

Cost to live American Dream copy

 

Pew Research’s analysis found that the only income group that has seen their net worth grow since 2001 are upper-income families whereas lower- and middle-income families’ net worth have declined significantly.

PEW wealth gains since 2001 The wealth gap between upper- and middle-income households has grown to a record high. The median net worth of upper-income families is now 6.6 times greater than the median net worth of middle-income families.

The upper-income, the affluent households are now and should continue to remain into the future as the households with the lion’s share of discretionary income and the propensity to spend it at entertainment venues and restaurants. They are the market to target.

About Randy White

Randy White is CEO and co-founder of the White Hutchinson Leisure & Learning Group. The 30-year-old company, with offices in Kansas City, Missouri , has worked for over 550 clients in 36 countries in North and Latin America, Africa, Asia, Europe and the Middle East. Projects the company has produced have won seventeen 1st place awards. Randy is considered to be one of the world’s foremost authorities on feasibility, brand development, design and production of experience destinations including entertainment, eatertainment, edutainment, agritainment, play and leisure facilities. Randy was featured on the Food Network’s Unwrapped television show as an eatertainment expert, quoted as an entertainment/edutainment center expert in the Wall Street Journal, USA Today, New York Times and Time magazine and received recognition for family-friendly designs by Pizza Today magazine. One of the company’s projects was featured as an example of an edutainment project in the book The Experience Economy. Numerous national newspapers have interviewed him as an expert on shopping center and mall entertainment and retail-tainment. Randy is a graduate of New York University. Prior to repositioning the company in 1989 to work exclusively in the leisure and learning industry, White Hutchinson was active in the retail/commercial real estate industry as a real estate consultancy specializing in workouts/turnarounds of commercial projects. In the late 1960s to early 1980s, Randy managed a diversified real estate development company that developed, owned and managed over 2.0 million square feet of shopping centers and mixed-use projects and 2,000 acres of residential subdivisions. Randy has held the designations of CSM (Certified Shopping Center Manager) and Certified Retail Property Executive (CRX) from the International Council of Shopping Centers (ICSC). He has authored over 100 articles that have been published in leading entertainment/leisure and early childhood education industry magazines and journals and has been a featured speaker at conventions of over 20 different leisure trade groups. Randy is the editor of his company's Leisure eNewsletter, has a blog and posts on Twitter - https://twitter.com/whitehutchinson
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