As economic pressures mount, luxury brands continue to thrive while mainstream retailers and discount chains face slower growth, highlighting a deepening divide in consumer behavior.
Champagne sales and high-end purchases remain strong as ritzy brands exhibit more confidence and pricing power than their mass-market counterparts. This divergence signals that the ultra-rich may buffer the economy in a downturn, but also exposes systemic fragility.
A comparative chart of the Stoxx Europe Luxury 10, the S&P 500, and the FTSE All-World Consumer Discretionary indices since 2016 underlines this gap. Luxury stocks have outperformed significantly.
The trend is visible across sectors. Upscale hotels saw a 6% rise in revenue per room this year, while mainstream lodging chains experienced declines (STR data). Life Time, a luxury fitness chain with memberships starting at $200/month, has seen its share price rise 85% since its 2021 IPO. In contrast, Planet Fitness, a lower-cost competitor, posted a modest 28% gain in the same period.
Data from Moody’s Analytics reveals that the top 10% of U.S. earners increased spending by 58% between 2020 and 2024, while the rest barely kept pace with 21% inflation. The U.S. Federal Reserve reports that this group also saw their net worth grow by 40%—adding over $30 trillion since 2019.
Meanwhile, UBS research shows that the wealthiest 1.5% globally control $214 trillion, nearly half of the world’s wealth, compared to just $2.4 trillion held by the bottom 40%.
Mass-market retailers like Target and Macy’s are feeling the strain, with shoppers downgrading to cheaper options. Rising tariffs are poised to worsen the situation for already-stretched consumers.
While Life Time tripled its Q1 net profit to $76 million this year through increased fees and spending, Planet Fitness reported a smaller 20% profit rise, despite a strong marketing push.
Conclusion: The current trajectory reflects a widening economic chasm where the wealthy sustain demand for luxury, but mainstream consumption is under pressure. Economies dependent on elite spending may stay afloat short term, but the imbalance underscores the risks of long-term inequality and unsustainable growth.
