US consumers spent 11 percent less on luxury goods in July compared to the same month last year, Citi Research said Friday citing data from a panel of 10 million credit card-holders. The drop suggests further deterioration in luxury demand at the start of the third quarter: Juneâs credit card data showed a 7 percent drop.
Luxury leather goods and ready-to-wear were the categories most impacted by the slowdown, with sales falling by 19 percent and 15 percent respectively, Citi said. Jewellery was more resilient, registering a 6.5 percent drop. Luxury watchmakers were an unexpected bright spot, with sales growing by 10 percent, posting a double-digit increase for the first time since early 2022.â
The US economy seems to be deteriorating at a faster pace than previously expected. For lower-income consumers in particular, excess savings have eroded with inflation,â Citiâs analysts said in a note to clients. âFor the past couple of years we have seen luxury demand weakness in entry-level categories usually targeting aspirational consumers, with sharp multi-year price increases posing a risk to volume growth.â
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