Terror threat, US polls hit luxury sales
Print Edition
THE terror threat in Europe, a strong US dollar and uncertainty over the US presidential elections have eroded the confidence of the globe’s big-spenders, holding luxury purchases flat in 2016, according to a study released yesterday.
Spending on luxury apparel, accessories and other personal items is expected to hold steady at 249 billion euros (US$273 billion) this year, a study by Bain Consultancy for the Altagamma association of Italian high-end luxury producers showed. Add in spending on luxury cars, yachts, jets, cruises, hotels, fine art, design and food, and the market tops a stunning 1 trillion euros.
As political events and monetary policy exert greater influence on luxury spending patterns, brands have turned their focus to wooing buyers in their home countries rather than counting on tourist arrivals to buoy sales, said Bain partner Claudia D’Arpizio.
“This is not happening by default,” D’Arpizio said. “Brands are refocusing on the local customer base and working to develop products that are more affordable and more inclusive to meet their needs.”
For the first time, spending by China’s super consumers shrank, albeit slightly from 31 percent of the total to 30 percent. Part of the shift was due to an increase in the number of middle-class Chinese travelers, who collectively spend less than higher rollers, she said.
While US presidential elections always put the freeze on consumer spending, D’Arpizio said this year’s squeeze was tighter due to a strong dollar, which also hurt tourist spending, and higher oil prices.
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