The trend: 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.
Shoppers open their wallets: 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.
Luxury retailers are bullish: 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.
On the other hand: Of course, luxury brands’ confidence in the market could easily be misplaced, as Netflix’s quick reversal of fortune demonstrates.
The big takeaway: 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.