Luxury products have a price issue. According to HSBC, product prices at major luxury brands were on average 54% higher than in 2019. And with luxury goods sales expected to fall 2% this year, a sharp drop from 11-13% growth in 2023 (according to consultancy Bain), many analysts, executives and customers believes that rising prices are the main reason for the industry’s downturn.
As wage growth and inflation slow, the potential for customers to “grow” into higher prices in 2025 is limited. Rebalancing the luxury value equation through a combination of more affordable pricing and enhanced craftsmanship and creativity will be key to reigniting demand for the sector.
This memo to BoF executive members details:
How price increases are impacting the demand for luxury goods The latest data on how luxury goods prices will evolve in 2024 The latest comments on pricing from luxury goods CEOs, CFOs and analysts Gucci How , Burberry and Prada are adapting their approach to pricing strategy
Written for executive members, Executive Memos dive deep into key industry themes and provide detailed intelligence to support strategy and decision-making. Become an executive member today and read the memo.
