We may be heading for a global recession, but there’s one group of people who can’t seem to stop spending — the world’s richest. While retail sales in general have been falling, and the stock market was down by 20 per cent last year, spending on luxury goods and experiences actually grew by roughly the same amount in 2022, as wealthy individuals unleashed their animal spirits.The data, which comes from a new Bain & Company study of the luxury market, challenges much of our conventional wisdom about luxury spending and the rich in general.
For starters, last year’s boom in the €1.38tn market was driven almost entirely by Gen Z and Y, who dominated the personal goods market (including luxury clothing, bags, jewellery, etc). “The spending of Gen Z and even the younger Generation Alpha is set to grow three times faster than other generations through 2030,” according to Bain. So much for youthful worries about the materialism of their predecessors.
Further confounding our assumptions, this luxe boom wasn’t fuelled by China, which was still in lockdown for much of last year, but by the US, which led the market. And within America, it was New York that doubled down on its status as the luxury capital of the world. Despite all that Wall Street and Silicon Valley money moving to places such as Miami or LA or Austin, the Big Apple is still where people go to drop big bucks on things like jewellery, watches, handbags and luxury tourism. (You need look no further than the opening of the opulent new Aman New York, where room prices can reach $15,000 a night).