Luxury Market Cools as Consumers Resist Price Increases

The global luxury goods market is entering a recalibration phase after an extended period of price-led growth. According to new data, years of successive price increases—intended to protect margins and elevate brand positioning—have contributed to a measurable softening in demand across multiple regions. The number of active luxury consumers has declined meaningfully since 2022, with middle-tier and even affluent clients slowing purchases as pricing outpaced perceived value.

This shift coincides with rising inventory levels. Stock-to-revenue ratios have climbed several points above pre-pandemic norms, suggesting that many brands misjudged the strength and elasticity of post-COVID demand. Although discounting remains limited—given the risk to brand equity—elevated inventories signal a market in search of balance.

Macro-factors are compounding the adjustment. Uneven recovery in China, fluctuating U.S. consumer confidence, and currency pressures have made forecasting more complex than in previous cycles. Several houses are now reevaluating their pricing architecture, assortment depth, and regional exposure to align more closely with what today’s buyers consider justifiable value.

Despite headwinds, the sector is not in decline so much as transition. Analysts expect a gradual return to moderate growth in 2026, supported by more cautious pricing, a focus on craftsmanship and service, and a renewed effort to rebuild long-term client trust. The coming year is likely to serve as a reset—less about expansion and more about restoring equilibrium between price, product, and customer expectation.