Luxury sector will be ‘resilient to recession’ in 2023, say consultants
The global luxury goods sector (including high-end wines and spirits) is projected to achieve sales revenues of €1.4 trillion this year, a 21% rise from 2021, according to consultants Bain & Co, shoring it up for a successful 2023.
Despite global economic uncertainty, the luxury market is predicted to keep on growing until the end of the decade in 2030.
According to management consulting firm Bain & Co., the performance of the luxury segment in the final quarter of this year “will largely depend on the progressive lifting of Covid-19 pandemic restrictions in China, as well as the evolution of European and American luxury consumer confidence in the face of rising inflation and cost of living pressures.”
However, the company’s report concludes that 95% of luxury brands will achieve positive sales growth this year, regardless.
There is already evidence of this in the drinks sector with Moët Hennessy CEO Philippe Schaus warning that the group was “running out of stock” of Champagne in the lead-up to Christmas
Last month, LVMH said its wine and spirits division had seen sales in Europe, the US and Japan rising “sharply” since the start of 2022, thanks to a return to international travel and “solid demand” from consumers.
Bain also concluded that the luxury market next year will be more resilient to recession than during the 2009 global financial crisis, especially if China’s restrictions to achieve zero cases of Covid continue to ease.
“The luxury market now appears better equipped to cope with economic turbulence with its consumer base both larger and more concentrated,” said the company.
Its report also credited “customer-centricity and a multi-touchpoint ecosystem” as factors that will contribute towards resiliency amid disruptions.”