A division in luxury spending?

Isaac Mostovicz writes that consumers in emerging markets continue to drive sales for high-end luxury retailers...

While it’s broadly agreed that the global recession has peaked and markets are now in a slow recovery, an interesting trend appears to be developing in luxury purchasing.

In line with the wider economy, mass-market luxury retailers are on the whole experiencing a steady increase in sales. High-end luxury sales however are soaring, experiencing significant year-on-year increases.

As a recent article in the Wall Street Journal identifies, “luxury goods companies are selling to the two groups of people who have any money left: the rich, who are getting richer and richer, and consumers in emerging markets, who are getting richer.”

Not only are emerging market tourists purchasing luxury goods when abroad, but as I wrote in a previous post, luxury retailers are finding new ways to sell online to such consumers in their home country, propelling sales.

But it appears not just the emerging markets that are responsible for high-end luxury sales growth; wealthy consumers in Europe and the US are spending similarly too.

Whether this is a concern for mass-market luxury retailers is yet to be seen, but it’s certainly the high-end luxury market that is booming for now.

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