New study shows global luxury shoppers are spurning high-end brands over steep price hikes

Global luxury goods sales are projected to decline for a second consecutive year as consumers reject steep price increases and seek better value, according to a new Bain & Co. study released Thursday.

The report forecasts a 2% drop in sales of high-end apparel, footwear, and handbags to €358 billion ($412 billion) in 2024, down from €364 billion last year. This marks the first two-year slowdown in the luxury market since the 2008-2009 global financial crisis.

“It is not a disaster scenario, yet you see consumers are trading down to accessible brands, not because they don’t have the money but because I think they are looking for something that is more ethical in the value-price proposition,” explained Claudia D’Arpizio, Bain partner and co-author of the study.

The current contraction follows what analysts now view as a post-pandemic bubble that saw sales peak at €369 billion in 2023. Despite recent declines, the market remains approximately 25% larger than pre-pandemic levels in 2019.

Bain’s regional analysis reveals varying performance across key luxury markets. The U.S. market is expected to remain flat at around €101 billion this year, while Europe faces slight contraction to €108 billion. Mainland China and Japan are projected to experience more significant declines of up to 8%, falling to €42 billion and €31 billion respectively. Only the Middle East shows growth potential, with forecasts of 4-6% expansion to €23 billion, driven primarily by Dubai’s strong luxury retail sector.

The industry’s challenges extend beyond sales figures, with Bain reporting that luxury brands have lost between 60 and 70 million customers over the past two years. This represents an 18% reduction in the customer base to approximately 330 million shoppers, who now demonstrate significantly less brand loyalty than in previous years.

Categories most severely affected include footwear and handbags, precisely where price increases were most aggressive. “These customers have plenty of bags in their wardrobes, including the same ones they can buy now,” D’Arpizio noted, suggesting that consumers see little justification for paying premium prices for products similar to what they already own.

The luxury market is experiencing a polarization mirroring broader societal trends. Ultra-high-net-worth individuals—those with personal wealth exceeding €30 million, numbering around 400,000 globally or 1.5 million when including family members—continue to demonstrate resilient purchasing power. Meanwhile, mainstream luxury consumers feel increasingly alienated.

“The ongoing polarization is not helping luxury consumption,” D’Arpizio observed. “The rest of the customers felt alienated because brands focused too much on these ultra-high-net-worth individuals, not only with the price elevation but also with the customer experience that was meant for few and not for the many.”

Social media has amplified ethical concerns around luxury pricing, with consumers increasingly questioning whether items justify their inflated costs. D’Arpizio characterized aggressive price hikes as “very dangerous,” creating a disconnect between price and perceived value.

Looking ahead, Bain forecasts a potential recovery of 3-5% in 2025, with sales potentially reaching €365-375 billion. This projection assumes U.S. growth supported by strong financial markets and recovery in China.

To regain momentum, luxury brands face critical strategic decisions about customer targeting and positioning. D’Arpizio suggests they must reconnect with their traditional role as symbols of “self-actualization and social improvement”—values that drove the industry’s growth in recent decades but have been overshadowed by price-focused strategies that risk alienating their customer base.