Business Insider reports that the global luxury goods market is experiencing a downturn as middle class consumers reduce their "aspirational" luxury spending. Defined by Pew Research Center as individuals earning between $54,572 and $161,220 annually, these consumers were once enthusiastic participants in luxury spending, especially during the pandemic.

However, rising prices and deteriorating financial conditions have curbed their enthusiasm. Bain & Company reported a 2% contraction in the global luxury market in 2024, marking its first major shrinkage in 15 years (excluding early COVID-19). Approximately 50 million luxury consumers exited the market in 2024, with second tier luxury buyers now making up just 55% of the market, down from 65% in 2021.

As prices for items like designer handbags and watches doubled over five years, consumers prioritized financial responsibility. Despite some resilience in luxury spending from wealthier customers, experts warn that ongoing economic challenges could further impact consumer spending.