The Impact of Coronavirus on Luxury Goods

May 2020

This report examines the impact of the Coronavirus (COVID-19) global pandemic on the luxury goods industry. Luxury shopping behaviour, channel dynamics and travel plans are seeing inevitable shifts as a result of lockdowns, as well as the closure of select retailers, businesses, luxury hotels and hospitality services, alongside travel restrictions. With the pandemic having a huge economic and psychological impact, consumer sentiment will be severely dampened, and large ticket items affected.

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Key Findings

Luxury goods hit from every angle

Whilst some luxury goods categories and retail channels may be less negatively affected than others, the pandemic represents an absolutely unprecedented shock to all areas, and no luxury goods category is likely to “benefit” from the COVID-19 crisis, with all categories affected in the short term.

Consumer confidence hit, whilst fear of contagion rises

Consumers fear contagion in the luxury retail space, whilst others see little point in buying personal luxury goods, such as leather goods, apparel and footwear, timepieces or jewellery. Owing to the conspicuous nature of some products many feel there is little opportunity to wear or use them in the foreseeable future. In addition, consumer confidence has been hit and spending on “on-essentials” has been put on hold.

Luxury hotels and hospitality hit hard

The ongoing COVID-19 outbreak is hitting the luxury travel market hard. Luxury hotels, travel, high-end travel retailers and hospitality services have all already suffered significant losses due to falling global demand with the long-term outlook looking uncertain as consumer spending on all such services is pulling back dramatically.

Experiential luxury but not as we know it

Whilst luxury foodservice has been severely impacted by the challenges of COVID-19, with all of the world’s luxury foodservice operators facing mandated shutdowns, many luxury hotels are now focused on home delivery services and providing online tutorials on how to replicate luxury hotel services at home, with lessons on services such as bed-dressing, creating the perfect “turn-down service”, flower arranging and fine-dining.

COVID-19 and business with purpose

Despite the extremely difficult times that luxury businesses are facing, many brands have been able to shift their focus and support local communities. These shifts include the reworking of supply chains to make the products consumers and the health industry currently needs as well as providing special discounts, food and shelter to healthcare workers.


Key findings
Luxury goods and COVID-19
COVID-19 in context

Economic Outlook

Global GDP is likely to contract in 2020 under the baseline scenario
The COVID-19 pandemic impacts both supply and demand
In our baseline view, the pandemic peaks in June 2020
Three scenarios examine the impact of a more severe outbreak
Our view in short
Forecasts for Real GDP growth in 2020 under different scenarios
Financial markets on risk-off mode as COVID-19 entered Italy
China: an early glimpse into the economic cost of the virus
COVID-19 highlights need for supply chain diversification
Fiscal stimulus a challenge with restrictions on expenditure
What could alleviate the economic effects of the pandemic?
What could exacerbate the economic impact of the pandemic?

Industry Impact

Luxury goods expected to be hardest hit across all fmcg markets
COVID-19 poses huge threat to USD1 trillion luxury goods industry
All luxury goods markets downgraded due to impact of COVID-19
COVID-19 impact at a glance
No category in luxury goods immune to effects of COVID-19 storm
Outlook for luxury travel bleak for key players in luxury hospitality
Experiential luxury forecast to be hit hard following rapid growth
Health of luxury market heavily reliant on the Chinese shopper
Sales of luxury leather goods set to be impacted by COVID-19
Routes to disruption
The five-step consumer progression of COVID-19
Consumer behaviour and consumption patterns shift to digital

Geographic Impact

Luxury sales in Asia Pacific heavily exposed to COVID-19 outbreak
China’s once robust economy now set to downgrade luxury goods sales
COVID-19 and the impact on China’s outbound travel
Hong Kong, once a luxury tourism hub, faces further headwinds
The US set to experience USD52 billion loss in sales in 2020
Expectations for US luxury goods further hit by cull on arrivals
US departures in previous crises
All key markets in Western Europe downgraded due to COVID-19

Corporate Response

How the global top 10 rides this storm sets outlook for industry
COVID-19 and impact on luxury goods’ supply chains from china
Premium and luxury car manufacturers set for further derailment?
But is Tesla’s digital model set to become more competitive?
Digital sales explode as full potential of omnichannel retailing unlocked
Super apps become more pronounced as need for human contact rises
Burberry uses its innovative technology to stay connected with shoppers
Global luxury powerhouses now victims of their own success?
Luxury goods corporates’ exposure to COVID-19
Main challenges for luxury fashion players
LVMH first to step up to help in fight against COVID-19
Kering plays its role in helping to combat COVID-19
Miller Harris holds back on trading and gifts its stock to Age UK
Luxury hotels open doors to care workers and bring luxury home


Outlook for the luxury goods industry
Purpose driven brands are better placed to ride the wave

About our Analytic Capabilities

About Euromonitor International’s Macro Model
About Euromonitor International’s Industry Forecast Model
Soft drivers and the Industry Forecast Model
Growth decomposition explained
Significance and applications for growth decomposition
Key applications for Industry Forecast Models


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