Growth mirage: Are luxury consumers buying more – or paying more?

April 30, 2026

Chanel Paris Fashion Week Spring Summer 2019. Image credit: Shutterstock

Please click or tap here to check out the agenda for Luxury Roundtable's Luxury Marketing Summit May 13 in New York. Three dozen CMOs and luxury professionals are speaking at this only global event for marketing and retail executives across all sectors of luxury.

There is only one business worldwide where the bulk of its growth over five years came from more price increases than unit sales: luxury. That strategy requires going back to the well time and time again, depleting the aquifers of good will and brand equity.

Well, now, the chickens have come home to roost – luxury sales are stuck in a rut. And marketing is being treated like the ER – dealing with emergencies after much damage is done.

Paying the price
Bar the United States, sales of luxury goods and services have slowed down worldwide. Sales in Europe are sluggish, China is meh, Japan, South Korea and India are holding up, and the Middle East is down.

LVMH boss Bernard Arnault has warned of a “global catastrophe” if the Iran War continues any longer. Blame the war-related malaise for clogged shipping routes, rising energy prices and inflation, stalled travel plans, and a lost tourist season and declining retail sales in Persian Gulf countries such as the UAE, Qatar, Bahrain, Kuwait, Saudi Arabia and Oman.

Will the likes of LVMH, Chanel, Kering, Richemont and Hermès go back to the old tried-and-tested ruse of raising prices to “harmonize” them worldwide because of “currency variations?” You bet they will.

After all, that’s what they did from 2019 to 2024, when price increases drove more than 80 percent of luxury sales, per McKinsey & Company’s State of Luxury report in January with The Business of Fashion. They’re counting on consumer tribalism and loyalty to continue patronizing the brands that best reflect their values.

Take a hike
The rupture is particularly with the younger generations – in other words, the future engines of growth. The aspirational sort have stepped back, appalled by the repeated price hikes and worries over their jobs. Those from the younger millennials and Gen Z sets have also realized the emperor may not have any clothes.

The scandals over manufacturing practices and sweatshop usage have created a negative whiff around exploitation. Lax country-of-origin requirements – how much of the product has to be made in France or Italy to be qualified as French or Italian, which is what people are buying? – question brand authenticity.

Add to that the assumption that consumers, young or mature, will absorb multiple price hikes each year when they’re not correlated to growing labor, material or rental lease costs.

This situation cannot continue long term.

And, no, marketing is not going to supercharge desire – as it has done in years past. Millennials and Gen Z – and the Gen Alpha following – are way too smart and aware of the value/price equation. They see past the messaging, posturing, imagery and videos.

Fair markups are accepted and understood as a model of doing business. But outrageous markups and seemingly unwarranted price hikes when the cost of making the product has been unmasked call into question the very authenticity of the brand. That is the risk that luxury brands run in this market.

MARKETING’S PROPER use is not cover for the sins of other departments in the company or other components that make a brand – quality, creativity, design, manufacture, retailing and pricing. Its job is to create desire, make the case for why the product or brand is superior to the competition through effective positioning and messaging – and help sell more product to the right audience.

Luxury brands will diminish marketing’s effectiveness if it’s treated as a wingman for exploitative price hikes.

We’ll be discussing these issues at Luxury Roundtable’s Luxury Marketing Summit May 13 in New York. Do check out our agenda by clicking or tapping here.

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Growth mirage: Are luxury consumers buying more – or paying more?

Growth mirage: Are luxury consumers buying more – or paying more?

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