Luxury Goods in Australia

Luxury goods in 2025: The big picture

After a slight decline was observed in retail value sales of luxury goods in Australia in 2024, a minor resurgence was experienced in 2025. However, these developments marked a departure from the robust expansion that characterised the early post-lockdown period of 2022 and 2023. Luxury goods faced persistent macroeconomic challenges, including elevated inflation and a decrease in real disposable income, which led to increased caution among luxury consumers, who became more discerning in their discretionary spending habits. Consequently, luxury goods witnessed only low growth across core categories, reflecting the broader economic uncertainty and financial constraints that prevailed. Despite these challenges, consumers continued to value enduring quality and heritage in their luxury purchases, which drove low growth.

2025 key trends

In 2025, luxury goods in Australia was significantly influenced by a range of key trends that shaped both consumer behaviour and industry dynamics. The consideration of sustainability remained paramount, with consumers increasingly favouring brands that demonstrated environmental responsibility and ethical sourcing across all luxury product categories, including fine wines/champagne and spirits, premium and luxury cars, experiential luxury, and personal luxury. Furthermore, personalisation gained momentum as consumers sought bespoke experiences and customised products that reflected their unique preferences and values, particularly within personal luxury and experiential luxury. The integration of artificial intelligence technologies advanced luxury retail by enhancing customer engagement through tailored recommendations, virtual try-ons, and augmented reality experiences, thereby contributing to a more seamless and personalised shopping journey.

Competitive landscape

In 2024, luxury goods in Australia was characterised by robust sales of premium and luxury vehicles, as well as a high level of concentration within this category. Consequently, the top five positions in overall luxury goods in value terms for 2024 were occupied by the leading players in premium and luxury cars, with these collectively accounting for nearly half of overall value sales. Tesla maintained its leadership position, attributed to its innovative electric vehicle (EV) lineup, particularly the Model S and Model X, which appealed to consumers seeking both environmental sustainability and high performance. However, despite remaining a significant player, Tesla experienced a notable decline in its retail value share due to intensified competition in the premium EV space, and a shift in consumer preference towards more affordable luxury EV options. Tesla was followed by Bayerische Motoren Werke (BMW), Volkswagen (Audi and Porsche), Mercedes-Benz Australia Pacific, and Toyota Motor Corp Australia (Lexus). These companies leveraged their brand heritage and expanded their electric and hybrid luxury sport utility vehicle (SUV) offerings, aligning with the growing demand for sustainable luxury vehicles. In addition, Mercedes-Benz broadened its electric lineup with the introduction of the smaller EQA 250+ and EQB 250+ City Edition, offering accessible luxury.

Retail developments

Luxury goods retailing in Australia continued to evolve in 2025, with players adopting a hybrid approach that balanced experiential physical retailing with a robust digital presence. Offline retail outlets remained the primary distribution channel, particularly for luxury jewellery, timepieces, and leather goods, where direct product interaction and personalised service were highly valued. Upscale department stores and specialised boutiques maintained their appeal by offering curated product selections, private shopping rooms, concierge services, and bespoke styling consultations, thereby meeting growing consumer expectations for exclusive and immersive shopping experiences. This reinforced the significance of physical retailing despite ongoing digital transformation.

What next for luxury goods?

Luxury goods in Australia is projected to experience a return to higher retail current value growth rates during the 2025-2030 forecast period, driven by a growing wealthy consumer base and shifting market dynamics. The affluent adult population, including affluent adults, HNWIs and ultra-HNWIs, is anticipated to rise steadily, thereby boosting demand for luxury goods across key categories. Furthermore, the growth of international arrivals and sustained domestic consumption will underpin a positive trajectory for luxury goods value sales. However, economic uncertainties and potential global market volatility may moderate growth, necessitating adaptability among players.