The US luxury market is experiencing a significant reduction in spending on luxury goods, particularly in the leather goods and ready-to-wear segments. Conversely, sales of luxury watches are recording unexpected growth. This contrast revealed by Citi Research highlights complex economic dynamics and shifts in consumer preferences.
Data compiled by Citi Research and published on August 9,show a decline in spending on luxury goods in the United States in July 2024 on a comparable basis. This 11% decline on a comparable basis is part of a persistent downward trend since the beginning of the year. Based on data from a panel of 10 million credit card holders, it shows a marked reduction in spending.
Americans less inclined towards luxury products
In detail, the US market, the world’s leading luxury goods market by value, saw spendingon luxury leather goods fall by 19%, and on ready-to-wear items by 15%, according to Citi Research. The previous month had already seen a 7% drop in this category. Spending on luxury goods had already fallen by 15% in February and 19% in January 2024.
This continuing downward trend can be explained by a number of economic factors:rising prices for luxury goods,persistent inflation, and the erosion of surplus savings, particularly among aspirational customers, are all contributing to the decline. Inflation in the United States is reducing purchasing power,leading to a reallocation of customers’ budgets towards experiences such as travel and restaurants, whose possibilities had been restricted during periods of confinement.
Watch segment preserved
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