LONDON, England – A new report produced by Ledbury Research reveals some green shoots in wealthy consumer sentiment, as the outlooks of the most influential CEOs in the luxury industry continue to fall.
The latest Luxury Market Insights report, released this week, looks across the world and uncovers stark regional differences in wealthy consumer sentiment. In the US, wealthy Americans have been impacted by the upcoming presidential elections – wealthy consumer sentiment in the region has been trending downwards since March. Meanwhile, across the Atlantic where the Eurozone crisis is still on-going, there has been a uptick since June. This has also been evident in Asia, despite the slowdown in the region’s most talked-about market, China.
Commenting on these findings, Nicola Ko, luxury analyst at Ledbury Research, expands, “Wealthy consumer sentiment in Asia declined all throughout 2011 and into the first 3 months of 2012. This was driven by fears over the China slowdown – cities such as Hong Kong and Singapore are highly dependent on spending by tourists from the mainland. While the region’s economic growth forecasts continue to be cut, pessimism of its wealthy consumers appear to have bottomed out. Recent indication shows a mild uptick between March and June this year.”
Despite these modest signs of encouragement, the luxury industry remains largely unconvinced. The report’s CEO Outlook Indicator, which tracks and analyses the outlook of over 25 CEOs of leading luxury companies, continues to edge downwards. Much of this stems from concerns over Europe, where sales growth has dropped to single-digits; and slowing prospects in Asia, where growth has flattened at around 19%. This is however, still in positive territory. With +1 on the indicator is most positive and -1 is most negative, the Indicator now stands at +0.58. This is 6% lower than its level in March, where it stood at +0.62 and represented a 19% fall from its level 6 months prior to that. As Michael Kowalski, CEO of Tiffany & Co. commented during their second-quarter results, “We think it’s only prudent to maintain a cautious near-term outlook about global economic conditions and the effects on consumer spending.”