Who else found 2025 a trying year? A more constrained consumer appetite for luxury further complicated by a downbeat UK and European economy coupled with challenging geopolitics made for a buffeting twelve months in luxury. Will this coming year be better? Almost certainly.
Whilst I don’t have a magic wand to wave for 2026, particularly when it comes to economics, politics and geopolitics (those things outside the control of luxury businesses), the auguries suggest a resilient, more normal year ahead, with global luxury growth back to its average 25-year percentage. Now is the time to embrace the opportunity to engage new customers with creative, innovative and experience-led offerings. As Walpole member Shackleton’s namesake, Sir Ernest Shackleton, famously said, "Optimism is moral courage", and with the confidence numbers shown on the Walpole Luxury CEO Sentiment Survey steadily growing, here’s to a strong 2026.
I’ve offered a few predictions about the luxury market this coming year below, gleaned not only from the major luxury studies published in the last six weeks – notably the Altagamma Consensus 2026 and the Bain-Altagamma Luxury Goods Worldwide Market Study - but also from Walpole’s work, both qualitative and quantitative, with its member CEOs. All of which will, I hope, offer some insight into trends, themes and opportunities for the coming year.
Where are we now?
Looking back to 2025 as a predictor of performance for 2026, global luxury’s resilience remains intact, with luxury spending for 2025 at €1.44 trillion (as reported in the Bain-Altagamma Luxury Goods Worldwide Market Study). Whilst that figure is down 3% on 2024, it should be seen in the context of a continued normalisation of the luxury market after the post-pandemic boom, up 14% on 2019. This is not to say that the luxury market won’t continue experience pressure, but given the challenges, both external and internal, faced by the sector over the previous twelve months, performance should be considered positive.
Which luxury segments have been winning, and why?
According to Bain, the outperformers have been remarkably consistent. Jewellery (particularly high jewellery) has done well, perceived by customers not only as an emotional reward, but also as an investment – and its price-to-value ratio has held up well. Watches, too, have performed, especially the most iconic brands. At the entry end of the market, beauty, fragrance and eyewear have been good performers, whilst leather goods and ready-to-wear have come under pressure. Outlet retail has gained momentum, underlining that it’s a market in which price – and perceived value for money – really matters.
It will come as no surprise to anyone to learn that experience-led luxury (travel, cruises, hospitality, gastronomy) has been the standout story, particularly from the most innovative players, reflecting a continuing shift from ownership to experience at every price point, not only the pointy end of the pyramid.
Growth in food-led luxury has been led by younger consumers looking for polished casual dining and by luxury customers looking for affordable yet lavish treats, as anyone who has noticed the alluring ubiquity of caviar at smart parties will attest to. Winners have been those embracing hyper-personalisation, intimacy, a strong emotional connection, and a clear purpose. It’s also a market in which one has to work even harder; the pace and quantity of one-off ‘had-to-be-there’ experiences and clever collaborations has accelerated over the last twelve months and will continue to do so.
Experience will continue to be the story, but so will value
When Hermes’ Pierre-Alexis Dumas said, "’Expensive’ is a product which is not delivering what it's supposed to deliver, but you've paid quite a large amount of money for it, and then it betrays you"’ in a CBS Sixty Minutes interview this time last year, he captured one of the biggest challenges facing global luxury. The price of luxury should never outweigh the quality and inherent value of the product. When it does, today’s more price sensitive customer – knowledgeable about luxury – votes with their wallet, giving a clear message to brands that value matters much more than money.
What we saw last year was a much greater scrutiny of whether pricing feels fair and justified, a rise in smaller indulgences, and some trading down within luxury. I think this is a place where British luxury brands can win: products made to last with exceptional quality of craftsmanship and raw materials offered at a sensible price makes the UK’s ‘True Luxury’ proposition a natural and defensible competitive advantage (albeit one requiring canny marketing). In fact, this idea of 'True Luxury' is something that we'll be exploring in-depth at the upcoming Walpole British Luxury Summit on 27th April – tickets are available here.
The customer is complicated
Bain’s most sobering statistic is that the global luxury customer base has shrunk back to 2013 levels. Given that 2025 saw the global population of HNWIs grow to 41.3mn, this seems counterintuitive, but suggests that it's no longer enough to assume that ownership of luxury goods or experience of luxury services is a given for the affluent.
So how does luxury emphasise its allure and win new generations of luxury consumers to its world? It’s no mean feat with existing and potential luxury customers spanning six or seven generations, many geographies and widely differing cultures and value systems. According to Bain, savvy brands will see three key pillars as commercial imperatives:
Entertainment: only captivating storytelling will engage today’s customers.
Emotion: luxury is the business of dreams, and building relevance, passion and memories consistently is the way to customer’s hearts.
Ethics: luxury can only do well by doing good. Working with integrity, transparency, fairness and purpose, not just at superficial ‘point of customer contact’, but at every aspect of the supply chain, must be an inviolable principle of what it means to ‘be luxury’.
To win in today’s market, you need to be ahead of your customers' expectations.
What kind of growth can be expected in 2026?
Complications and continued challenges are the new normal, but the Altagamma Consensus 2026, which aggregates the views of more than 20 analysts from Bain to BCG, Deloitte to Deutche Bank, plus insights from major luxury CEO’s across a range of sectors, suggests cautious optimism and a growth of 5-6% EBITDA globally. The average annual growth of the whole global luxury sector over the last 25 years has been 6%, so, in that context, the Altagamma Consensus’s forecast suggests a healthy, structural rate of growth for 2026.
Different geographies present widely varied growth opportunities: brands can expect moderate growth in Europe of around 3-3.5%, with Southern Europe more buoyant than the traditionally stronger economies of France, Germany and the UK. The Middle East will be a standout territory, with a rising importance as both an export destination and a visitor market, and growth potential above 6%. That's why, later this month, Walpole will lead a trade mission for its members to Dubai and Abu Dhabi to help British luxury brands understand how to maximise the opportunity of this region.
The US also promises to maintain its strength as a top export destination, despite tariff complexities, and a strong inbound visitor, despite the weakness of the dollar making Europe and the UK more expensive.
China remains slow but will improve on last year, with affluent visitors from China increasing compared to previous post-pandemic years.
Emerging markets like Singapore, Vietnam, Thailand, Mexico and Brazil may be small and complex, but are also in growth.
India continues to be a market to watch and to begin to explore: it’s thought that this could be a region where British luxury could gain a competitive advantage, not least from an inbound visitor perspective given the UK’s long historic links and strong British Asian community. Walpole’s Luxury CEO Sentiment Survey underlines the long term strategic potential of India and we will host a number of member round-tables on the India opportunity during 2026.
