No cost-of-living crisis in the luxury goods sector, study finds

By our News Team | 2023

High demand is being driven by the rising number of high net-worth individuals and mass affluence globally, researchers say.

Despite so many consumers around the world struggling with rising inflation and higher prices, retailers of luxury goods say they’re having a field day because the growing wealth of a small elite is boosting sales.

A new study that interviewed 50 senior executives at major luxury retailers in in Asia, Africa, Europe, the US and South America predicts annual growth of more than 5.6% for the luxury retail sector over the next three years.

Luxury Goods Retailing

Photo via Wikipedia

In addition, senior executives are confident about rising revenues and margins at their firms and for the market as a whole.

The report was done communication technology company Communications Specialist Ltd, in conjunction with research agency Pure Profile.

Even though it may sometimes not feel like it, the researchers say there are a rising number of high net-worth individuals and growing mass affluence globally. Pent-up demand in the wake of Covid-19 is also a factor.

Personalised product offers are a sales driver

Of the executives interviewed, 31% said increased sales are down to more personalised offers from luxury retailers for clients.

In addition, almost all of those questioned (96%) believed revenues at their firm will be higher this year than in 2022, while 22% said they expect revenues to be 50% higher in 2023.

Price-cutting is not a factor. More than 90% of interviewees said margins this year will be higher than last year, and most believed margins will be higher than pre-Covid levels. Up to 40% said margins will be significantly higher than pre-Covid levels.

“The luxury retail sector globally is firmly on a growth path, with the market set to expand by 5.6% a year for the next four years,” said Kevin Buchler, Chief Marketing Officer at Communications Specialist Ltd.

“It is not simply a case of the post-Covid recovery, as executives point to the rising number of wealthy individuals worldwide – as well as increasing sophistication and personalisation of offers from retailers.”

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    Dr Kin Kariisa

    Group CEO - Next Media

    Dr. Kin Kariisa is an extraordinary force at the helm of Next Media Services, a conglomerate encompassing NBS TV, Nile Post, Sanyuka TV, Next Radio, Salam TV, Next Communication, Next Productions, and an array of other influential enterprises. His dynamic role as Chief Executive Officer exemplifies his unwavering commitment to shaping media, business, and community landscapes.
    With an esteemed academic journey, Dr. Kariisa’s accolades include an Honorary PhD in exemplary community service from the United Graduate College inTexas, an MBA from United States International University in Nairobi, Kenya, a Master’s degree in Computer Engineering from Huazong University in China, and a Bachelor’s degree in Statistics from Makerere University.
    Dr. Kariisa pursued PhD research in Computer Security and Identity Management at Security of Systems Group, Radboud University in Nijmegen, Netherlands. As a dynamic educator, he has shared his expertise as a lecturer of e-Government and Information Security at both Makerere University and Radboud University.

    Dr Kin did his PhD research in Computer Security and Identity Management at Security of Systems Group, Radbond University in Nigmegen, Netherlands. He previously served as a lecturer of e-Government and Information Security at Makerere University in Kampala, Uganda and Radbond University in Netherlands.

    Dr Kin did his postgraduate courses in Strategic Business Management, Strategic Leadership Communication and Strategies for Leading Successful Change Initiatives at Harvard University, Boston USA.

    • Other current and previous roles played by Dr Kin Kariisa:
    • Lecturer of e-Government and Information Security to graduate students at Makerere University, Kampala and Radbond University in the Netherlands
    • Director of Eco Bank Uganda Limited, one of the largest banks in Africa
    • Chairman of the National Association of Broadcasters, an umbrella industry association for all Television, Radio and online broadcasters in Uganda.
    • Chairman of Board of Directors of Nile Hotel International, that owns the leading hotel in Uganda, Kampala Serena Hotel.
    • Chairman of Board of Directors of Soliton Telmec Uganda, the leading telecom company in Optic fibre business managing over 80% of optic fibre in Uganda.