The global luxury market is expected to return to modest growth in 2026, with sales forecast to rise between 2% and 4%, according to Kearney’s Global Luxury Industry Outlook.
The projection follows a slowdown in recent years. The sector grew at an average annual rate of about 5% between 2019 and 2023, before declining in 2024 and remaining flat in 2025.
Kearney’s estimate is slightly below other industry forecasts, including Bain & Company’s projection of 3% to 5% growth this year.
Katie Thomas, lead of the Kearney Consumer Institute and co-author of the report, tells Marketing Daily the research focused on three distinct luxury buyers: traditionalists who spend freely and live a full luxury lifestyle; selective splurgers who balance restraint with continued engagement; and aspirational consumers. This final group is the most tentative and closes their wallets fastest when prices or economic uncertainty rise.
But those in all three groups can view themselves as economically fragile. “Many people are considered high-net worth because of income, but they may be one job loss or one housing crisis away from having to really pull back,” Thomas says.
Even among those three subtypes, luxury customers shop due to widely varied motivations. Some will splurge based on craftsmanship, others on trendiness, and some because they sense a good deal, according to Mediapost.
The report also notes a concentration of spending, with the top 2% of customers accounting for around half of global luxury sales.
Younger consumers remain active in the category but are increasingly purchasing through resale channels, according to the report.
On the supply side, Kearney recorded 11 creative director changes across major luxury brands, around three times the historical average.
Despite the recent slowdown, the report indicates the market has stabilized, with growth expected to resume in 2026.
Middle East on track
In contrast to the global trend, the Middle East luxury market continues to expand. Luxury spending in the region is expected to grow between 4% and 6%, according to Bain & Company. Separate data from Chalhoub Group showed the GCC personal luxury market grew about 6% in 2024 to reach approximately $12.8 billion.
