As a result of rising energy costs and inflation, things that used to be taken for granted are now becoming luxuries for most people, according to one expert. "Special expenses such as travel - and even restaurant visits or mobile phone upgrades - are becoming something extraordinary for many people - and thus a luxury," said Fernando Fastoso, luxury brand expert at Pforzheim University, the German Press Agency.
"The consumption of high-priced products for purposes of recognition or pleasure remains a luxury - depending on one's own attitude to it," said the professor. Beyond products, luxury is extraordinary enjoyment. The rising cost of living would certainly push the line of what is extraordinary.
Fastoso, who has held the first luxury professorship in Germany since the 2020/2021 winter semester, predicted that rising inflation will affect demand for luxury, especially among the middle class, who consume luxury on special occasions. "Less impact can be expected from the luxury consumption of the upper classes as they enjoy greater economic stability."
Luxury consumer behavior is not changing anytime soon
From the professor's point of view, however, the luxury industry will not change in the medium term - and neither will the definition of luxury. "The desire for luxury products is too high for that - and always has been." The decisive factor is how long the energy crisis lasts. The Corona crisis has shown that luxury consumption has recovered faster than forecast. "As soon as people were allowed to fall back into their old consumption habits, that's what they did. We call it 'revenge spending'."
Attitudes towards consumption are not changing that quickly, explained Fastoso. "The luxury market is also less susceptible to such changes because it is not a monolith." It is a global market made up of many national and regional markets. "In other words, global demand for luxury goods from regions in which the economic situation is developing better can offset a certain amount of declining demand in other regions."
