What: Even though the global context is very tense, luxury does not seem to feel the pinch.

Why it is important: The richest customers have changed in nature and behaviour. Department stores have noticed and are all adapting their strategies. But can this last if luxury brands decide to go solo?

A new study by Bain & Company shows that while retail sales in general have been falling, and the stock market was down by 20% 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 challenges much of our conventional wisdom about luxury spending and the rich in general.

The boom in the luxury market was driven almost entirely by Gen Z and Y, who dominated the personal goods market, and it was not driven by China but by the US, particularly New York. Luxury experts say that there’s simply been so much wealth created over the past two decades that even a 20% stock market price correction is a blip for the top 5% of the market. And it is this top 5% that represents 40% of overall luxury market sales.

Wealthy people have more time in which to spend their money, since they now live roughly a decade longer than their low-income counterparts, thanks to better healthcare, diet, nutrition and rest. Additionally, there are more of them than there used to be, because of the continued growth of an asset-owning class in developing countries. The growth of a secondary market and lack of worry about conspicuous consumption are additional contributing factors.

While the lower 80% of luxury consumers may fall off as inflation increases, the world's richest are spending more.

Luxury boom shows the staying power of the ultra-rich