[eMarketer] The luxury retail market shows no signs of fading
US consumer spending on luxury retail shows no sign of slowing, even as inflation and price increases cause many shoppers to trade down and cut back on discretionary purchases.
While many consumers are tightening their belts as they struggle to absorb higher food and gas prices, affluent Americans are ramping up their spending after largely holding back over the past two years.
Affluent consumers are currently in a position to drive $257 billion in spending, per Visa’s chief economist, Wayne Best.
Moreover, a significant portion of the US population is better off now than before the pandemic: 13% of consumers have better jobs and more savings, while 48% are employed with stable finances, per a survey by agency EP+Co.
Luxury brands like Burberry have credited strong growth in US sales as one major reason for their positive results: Burberry noted in its report for the full fiscal year that the Americas was “the stand out region” as full-price sales in the US almost doubled, thanks to an influx of new customers.
Even as lockdowns in China have dented brands’ growth opportunities, companies from LVMH Moët Hennessy Louis Vuitton to Canada Goose to Ermenegildo Zegna Group are reporting higher revenues and an optimistic outlook for the future.
eMarketer posits that the strong demand for luxury items shows that many consumers are continuing to spend, and they’re not looking for bargains. That bodes well for luxury brands hoping growth in the US will offset continued losses from lockdowns in China.
Read the full eMarketer article here
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