Luxury Market Faces Mild Dip as Economic Uncertainty Grows

The global luxury market saw a slight downturn last year, with spending dipping by 1%, marking one of the sector’s most significant slowdowns in over a decade, according to new data from Bain & Company and Altagamma, the Italian luxury goods association.

After a strong post-pandemic rebound that drove luxury sales to €369 billion (approximately $435 billion) in 2023, the market edged down to €364 billion ($429 billion) in 2024. Although the decline reflects current exchange rates, the figures remained flat when adjusted for currency fluctuations.

The report points to a host of global challenges that are weighing on consumer confidence — from economic instability and political tensions to volatile financial markets and shifting currencies. “Luxury spending, which has always been highly reactive to global uncertainty, is feeling the pressure,” the analysis states.

Still, the sector isn’t unfamiliar with turbulence. The report emphasizes the industry’s ability to adapt and bounce back, even amid ongoing volatility.

Interestingly, despite a downturn in tourism, Europe continues to see solid interest in categories like jewelry. Products that blend timeless craftsmanship with exclusivity — including high-end apparel, eyewear, and ultra-premium items — are showing resilience. The aspirational tier of luxury also remains a bright spot.

However, other categories are feeling the pinch. Watches, leather accessories, and footwear are underperforming unless brands are pushing boundaries through genuine innovation.

Another concern flagged in the report is the declining enthusiasm for luxury goods among younger shoppers, particularly Gen Z, who are becoming increasingly critical of traditional luxury branding.

While demand for physical luxury items may be softening, experiences are thriving. High-end travel, fine dining, and other immersive luxury services outpaced product sales, especially in the first quarter of 2025 — a clear signal that consumers are prioritizing meaningful experiences over material status symbols.