Luxury Goods in the US

Luxury goods in 2025: The big picture

Retail current value sales of luxury goods in the US continued to grow in 2025, with stronger momentum than observed in the previous year. However, growth was still tempered by a combination of global uncertainties and domestic economic pressures that influenced consumer behaviour. Internationally, geopolitical tensions persisted, while domestically, rising inflation rates and an uncertain economic outlook led to cautious spending among high-net-worth consumers. The decline of inbound arrivals in 2025 hampered growth in sales of personal luxury goods in the US, particularly in key retail hubs that rely heavily on tourist spending. Recent US tariff announcements further strained trade relations with major luxury-producing regions like Europe, making the US a less favourable destination for luxury shopping. In contrast, countries such as Japan and those in Europe offered more competitive pricing and tax-free shopping benefits, drawing affluent travellers away from the US and shifting global consumer demand towards more attractive luxury markets.

2025 key trends

In 2025, luxury goods in the US was significantly shaped by evolving consumer expectations surrounding transparency, personalisation, and the integration of artificial intelligence (AI). Heightened demand for transparency in sourcing and ethical production processes persisted across all luxury categories. The trend towards personalisation also gained momentum as luxury brands increasingly harnessed AI technologies to deliver highly customised product recommendations and bespoke experiences. This technological advancement not only enhanced customer engagement, particularly among digitally-savvy consumers, but also created opportunities for brands to forge more intimate connections with their clientele. These trends highlighted a broader shift within luxury goods towards mindful consumption and innovation.

Competitive landscape

Luxury goods in the US in 2024 was characterised by the strength of premium and luxury car manufacturers, with the top five positions occupied by Tesla, Mercedes-Benz USA, BMW of North America, Volkswagen of America, and Toyota Motor Sales USA. Tesla maintained its leading position, benefiting from its reputation for sustainable and high-performance vehicles among affluent consumers. However, the company experienced a notable contraction in its value share due to increased competition from established manufacturers expanding their electric vehicle offerings. Mercedes-Benz drew closer to the leader due to the constant development of new electric vehicles, such as the 2025 GLS 600 4MATIC, while continuing to sell fossil fuel cars. BMW of North America, meanwhile, also saw a notable increase in its share in 2024, driven by a combination of new product launches and a strategic expansion of its dealership presence, which enhanced consumer accessibility and engagement.

Retail developments

In 2025, luxury goods in the US remained characterised by the prevalence of offline retail channels, particularly for personal luxury goods and fine wines/champagne and spirits. Physical stores continued to play a crucial role in fostering emotional connections and brand loyalty among affluent consumers, driven by the tactile experiences and personalised services they offer. Luxury jewellery, timepieces, and leather goods are among the categories that benefit most from these in-store experiences, with flagship boutiques and high-end department stores in major metropolitan areas such as New York City, Los Angeles, and Miami offering bespoke consultations and interactive displays. To further enhance brand experiences, luxury brands such as Chanel, Louis Vuitton, and Prada opened new flagship stores in prime locations like SoHo and Fifth Avenue in New York City, offering curated collections and elevated in-store experiences. The popularity of pop-up installations also surged, with brands like Glossier and Rhode Skin creating interactive and entertaining experiences that generated significant consumer interest and social media engagement.

What next for luxury goods?

Steady retail current value growth is anticipated for luxury goods in the US from 2025 to 2030, albeit at a more moderate pace than observed in the review period. This expansion is expected to be driven by an increasing number of affluent adults, HNWIs and ultra-HNWIs, as reported by Euromonitor. Premium and luxury cars is forecast to remain the largest category within luxury goods, as wealthy consumers see luxury vehicles as a clear sign of status and prestige. They also appreciate the exquisite designs, superior performance, enhanced comfort, and cutting-edge technology. Meanwhile, experiential luxury is set to see the highest growth, particularly amongst younger demographics, who are increasingly seeking unique and exclusive experiences. To meet consumer demand, luxury brands will need to innovate and engage strategically with consumers, enhancing customer experiences while maintaining exclusivity.