European luxury items really a luxury
TEXT OF STORY
Renita Jablonski: Over the years, Americans have developed a taste for imported luxury goods like expensive cheeses and wine, clothes too. But with the weak dollar driving up prices of imports, many consumers are taming their fashion and taste buds. Marketplace’s Dan Grech has more.
Dan Grech: The euro is up 15 percent against the dollar in the past year. That means European luxury goods are getting a lot more expensive to bring into the U.S. That’s a tough proposition when U.S. shoppers already feel strapped.
Nariman Behravesh is chief economist for Global Insight. He says European exporters are in a bind.
Nariman Behravesh: If they raise their prices then there’s a good chance they lose market share to let’s say American producers. The alternative is that they don’t raise their prices by very much. Then, they have to settle for a smaller margin on that luxury good, whether it’s a watch or a silk scarf or a designer dress.
The World Institute for Strategic Economic Research says imports of European shoes, chocolates and sparkling wine have plunged.
Imports of high-end Swiss cheese, for one, are down 15 percent this year.
I’m Dan Grech for Marketplace.
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