Luxury Goods in Canada

Luxury goods in 2025: The big picture

In 2025, luxury goods in Canada demonstrated robust retail current value growth of 5%, continuing the steady expansion that began in 2021. However, this growth was tempered by macroeconomic challenges, including a rising cost of living that constrained discretionary spending. Some middle-income consumers exhibited caution amid economic uncertainty, adopting more conservative purchasing behaviours. Despite these headwinds, premium and luxury cars, which represents the largest category by value sales, displayed dynamism. This was largely driven by increasing demand for sustainable electric and hybrid vehicles, as well as a desire for cutting-edge technology.

2025 key trends

In 2025, luxury goods in Canada was significantly influenced by shifting consumer preferences, particularly towards sustainability and personalisation. Growing environmental awareness among younger demographics, including Millennials and Generation X, drove a strong emphasis on eco-friendly materials and transparent supply chains, as seen in categories as diverse as premium and luxury cars, and luxury leather goods. Some luxury brands distinguished themselves by demonstrating creative and engaging ways to showcase their commitment to sustainability. For instance, Prada launched its Prada Mariner Re-Nylon small bucket bag, made from recycled polyamide, as part of its Sea Beyond initiative with UNESCO's Intergovernmental Oceanographic Commission. This initiative aimed to raise awareness about sustainability and ocean preservation. Prada's Re-Nylon project utilised ECONYL, a regenerated-nylon yarn that can be recycled, made from discarded plastic collected from landfill sites and oceans. Although this initiative falls outside the luxury leather goods category, it exemplifies the shift in personal luxury towards sustainability.

Competitive landscape

In 2024, the competitive landscape in luxury goods in Canada was led by Volkswagen, driven by its high share of sales in premium and luxury cars. As this category has high sales and a high level of concentration relative to others in luxury goods, the next five players in overall luxury goods were also in premium and luxury cars – Tesla, Daimler, Bayerische Motoren Werke, Toyota Motor Corp, and Tata Motors – indicating the significant presence of premium and luxury cars in the market. Volkswagen's leadership was established after it overtook Tesla in 2024, with both its Audi and Porsche brands achieving strong performances, particularly with Audi's addition of the Q4 Sportback e-tron to its electric lineup. Tata Motors also experienced considerable growth, attributed to the popularity of Land Rover's Defender model, which resonated with Canadian consumers' preference for vehicles that combine ruggedness with sophistication.

Retail developments

In 2025, offline retail continued to dominate luxury goods distribution in Canada, underscoring the persistent preference among wealthy consumers for in-store shopping experiences that are both personalised and experiential. Notwithstanding the considerable growth of e-commerce, physical retail remained the primary contributor to sales, particularly in major urban hubs such as Toronto, Montreal, and Vancouver. These cities witnessed substantial refurbishments and expansions of established luxury retail premises, thereby enhancing the allure of physical locations and reinforcing their market prominence. For example, the German luxury brand Hugo Boss opened a new store in Canada at the Royalmount luxury mall in Montreal in 2025. Luxury brand Maison Margiela also opened its first store in Canada in 2025, featuring its selection of apparel. Furthermore, Oakridge Park mall in the Vancouver area is slated to open in early 2026, with stores from several luxury brands expected, including Louis Vuitton and Prada. The retail expansion of luxury brands is intensifying the competition, increasing the pressure on brands to offer compelling, trendy, and unique value to consumers while enabling them to shop both online and offline. The irreplaceable value of in-person interactions and sensory product assessments, especially for high-end categories like luxury leather goods, luxury jewellery, and luxury timepieces, further consolidated the dominance of physical retail in 2025.

What next for luxury goods?

Luxury goods in Canada is anticipated to show robust retail value growth throughout the forecast period, with a current value CAGR of 4% (2025 constant value CAGR of 2%). This will be driven by a steady expansion in the number of HNWIs, ultra-HNWIs, and affluent adults, as indicated by Euromonitor's projections. The growing affluent consumer demographic, fuelled by strong economic fundamentals and ongoing immigration, will sustain growth in demand for key luxury categories, including luxury leather goods, premium and luxury cars, and luxury hotels. While geopolitical uncertainties, particularly in relation to the Chinese market, may moderate international tourism-driven luxury spending, the increasing presence of affluent domestic consumers is expected to offset this, supporting steady growth. Furthermore, the proliferation of luxury retail hubs across major cities such as Toronto, Vancouver, and Montreal will enhance accessibility and experiential engagement for luxury shoppers, thereby stimulating value sales.