Luxury Spending Slips Amid Economic Headwinds
July 14, 25
(IDEX Online) - Luxury spending slipped by 1 per cent last year as the sector faced its biggest potential setbacks for at least 15 years.
That's according to research by management consultants Bain & Company together with Altagamma, the Italian luxury goods manufacturers' association.
The segment posted a post-pandemic rebound of EUR 369bn (USD 435bn) in 2023, but fell to EUR 364bn (USD 429bn) last year (the decline is at current exchange rates and is "flat when adjusted for currency movements").
"Worldwide luxury spending, historically sensitive to uncertainty, is coming under intensified pressure as luxury consumers' confidence is eroded by current economic upheavals, geopolitical and trade tensions, currency fluctuations, and financial market volatility," says the report.
It goes on to say that despite volatility becoming 'business as usual', the luxury industry has shown long-standing resilience in the face of such challenges.
The report notes that Europe is seeing continuing interest in jewelry despite weakened tourism.
"Jewelry, apparel, and eyewear remain strong, with positive performance for 'uber-luxury' items, as well as in the aspirational segment," it says.
But watches, leather goods, and footwear are facing headwinds, "unless backed by true innovation".
The report also highlights a significant decline in luxury spending among younger generations, notably Generation Z, who are becoming more skeptical of luxury brands.
While personal luxury goods are slipping, luxury experiences (such as travel and gourmet dining) are outperforming goods, especially in the first quarter of 2025.