Presenting a significant challenge to the retail industry, consumer spending, especially on luxury items, seems to be slowing in 2025. Inflation fatigue and economic uncertainty are fueling a new wave of austerity, impacting luxury retail hardest. Gaining traction on social media, the no-buy 2025 movement, particularly among Gen Z, is encouraging minimal spending, focusing only on essentials.
Citing a slowing global economy and changing consumer habits, many brands are experiencing a period of ‘reckoning’ in 2025, says a new report by McKinsey for The Business of Fashion.’
As per this report, high-end brands are already feeling the pinch of this trend. World's largest luxury brand, LVMH registered a decline in sales during the December quarter. The brand’s net income and profit margin also declined significantly. As per experts, this is a result of wrong decisions of luxury brands including excessive price increases and over-reliance on specific product categories.
Despite strong stock markets and home values, affluent consumers seem hesitant to make purchases. They are being prompted by geopolitical tensions and economic uncertainty to protect their wealth. Younger generations and average consumers are deferring unnecessary purchases, notes the report.
Retailers, from Walmart to Ferragamo, need to adapt to this growing trend, the report states. They need to understand customers needs and deliver accordinglyl. The growing ‘No Buy 2025’ movement demands, brands cater to the priorities of the new generation of shoppers.
