According to three credit card companies, Americans have cut back on spending on luxury purchases, from clothing to accessories.
This month, Citigroup, Mastercard and Bank of America unveiled data all attesting to a decline in spending on luxury goods in the United States. Separate estimates from the three companies show that Americans all reduced spending on these items by 2 to 4 percent in August and 5 to 6 percent in September, compared to 2021.
While product sales are still doing very well in their niche, compared to mid-range and premium brands, the luxury sector has reason to wonder about the future.
Jean-Jacques Guiony, CFO of LVMH, said last week, however, that the company has so far seen no signs that shoppers are pulling back, even on entry-level purchases.
Less spending among middle-income Americans
The reduction in such spending was greatest among middle-income Americans (between $50,000 and $125,000 a year) and those with annual incomes below $50,000, according to a Bank of America study.
Mario Ortelli of mergers and acquisitions consultancy Ortelli & Co. says that in the U.S., high-priced brands such as Hermès and Dior are probably more immune to a downturn than affordable luxury brands such as Michael Kors.
Mastercard’s “SpendingPulse” report, meanwhile, shows that luxury goods purchases, excluding jewelry, fell 5.2 percent in September, year-over-year, while spending on restaurants and travel was up.
The price factor is also influencing, in light of the increases seen at Chanel or Louis Vuitton for some of their bags. This increase can be a deterrent, or delay the purchase.
Brands at the lower end of the luxury scale are also looking to move upmarket and increase their prices. According to Ortelli, “In a market like America where people buy a lot of things, consumers are becoming more demanding and buying less in quantity but better quality.”
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Passionnée depuis son plus jeune âge par l’art et la mode, Hélène s’oriente vers une école de stylisme, l’Atelier Chardon-Savard à Paris, avec une option Communication. Afin d’ajouter des cordes à son arc, elle décide de compléter sa formation par un MBA en Management du Luxe et Marketing Expérientiel à l’Institut Supérieur de Gestion à Paris dont elle sort diplômée en 2020. Elle a notamment écrit des articles lifestyle et beauté pour le magazine Do it in Paris et se spécialise en rédaction d’articles concernant le luxe, l’art et la mode au sein du magazine Luxus Plus.********** [EN] Passionate about art and fashion from a young age, Hélène went to a fashion design school, Atelier Chardon-Savard in Paris, with a Communication option. In order to add more strings to her bow, she decided to complete her education with an MBA in Luxury Management and Experiential Marketing at the Institut Supérieur de Gestion in Paris from which she graduated in 2020. She has written lifestyle and beauty articles for Do it in Paris magazine and specializes in writing articles about luxury, art and fashion for Luxus Plus magazine.