Readings of consumer confidence are grim. US consumer confidence is at lows not seen since the oil price-inspired recession in 1980. In the UK, consumers feel only slightly less bad then they did when Lehman went bankrupt, and when interest rates soared in 1990. The mood in many European countries is almost as dark.

The effects of the dark mood on retailers are easy to see. Consumer pessimism is permeating businesses normally resilient in bad times. Ahold, the Dutch grocer with operations in the US and Europe, has announced a 21 per cent drop in quarterly profits from last year. At the Co-operative Group, a UK grocer, the first-half fall was 12 per cent. Investors have taken note, pushing the shares in the world’s three largest grocers by sales (Tesco, Carrefour and Ahold) down to about a 20 per cent discount to the market. Even brewers are struggling; Heineken has cut is 2011 growth forecasts to zero.

But not everyone is down in the dumps and for companies catering to rich people life is good. On Friday, fancy jewellery maker Tiffany unveiled a one-third increase in its second-quarter profits compared with last year. It found it easy to pass on rising commodity prices to its customers. While the S&P 500 consumer discretionary index has been essentially flat over the past five years, shares of some big luxury goods companies have performed remarkably well. LVMH and Richemont have each returned investors about 60 per cent, and investors in high-end rival Hermes have received back their investment fourfold. All three trade above their pre-recession highs.

During the 1930s depression, the joke was that the reduced spending power of normal shoppers pushed down prices, so the rich could afford to bathe in milk. These days, the elite can load up on handbags, jewellery, and custom-made saddles.

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