The global luxury sector is poised for modest growth next year, with forecasted sales increases in the 3% to 5% range following a period of stagnation. However, years of relentless price hikes are now threatening long‑term expansion by alienating both aspirational buyers and even the ultra‑affluent, according to insights from Bain & Company.

Industry Growth And Regional Dynamics

Bain’s analysis indicates that the future uplift will be fueled by steady momentum in the United States, resilient local demand in Europe and Japan, and a gradual recovery of trends in China. This multifaceted growth, however, is shadowed by a troubling trend of pricing strategies that are distancing a broad customer base.

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The Price Hike Challenge

Bain warns that the persistent price increases have not only priced out aspirational consumers but have also left high‐end clients feeling betrayed. Federica Levato, a partner at Bain, said, “You cannot target only the top customers. They are starting to feel betrayed by the industry’s escalating prices.” This sentiment comes as luxury brands attempt to rectify past missteps with new creative initiatives—an approach that Levato doubts will suffice if the underlying pricing issue remains unresolved.

The Impact On Customer Loyalty

The luxury customer base shrank from 400 million in 2022 to approximately 340 million in 2025, with forecasts predicting a further decline of 20 to 30 million clients. Even as big spenders now represent around 46-47% of the €358 billion personal luxury goods market, their spending has plateaued, indicating a broader consumer fatigue.

Navigating Excess Inventory

Another significant challenge for industry players is the mounting inventory. Stock-to-revenue ratios have increased by three to four percentage points compared to 2019. Levato suggests that luxury brands may need to leverage outlet channels and off‑price e‑commerce to clear excess product—a strategy complicated by concerns over brand image and strict EU sustainability regulations that prevent the destruction of unsold goods.

Future Forecast Amid Uncertainty

Geopolitical uncertainties, including fluctuating trade policies and economic questions in markets like China, add to the complexity of forecasting the industry’s trajectory. Notably, Kering CEO Luca de Meo has already signaled a need to reassess pricing and product strategies following years of aggressive increases. With luxury shares rallying—evidenced by the Stoxx Luxury 10 index, which recovered 19% from its April lows—the industry is at a critical juncture where rebalancing market appeal and sustainable growth remains paramount.