Soaring Luxury-Goods Prices Test Wealthy’s Will to Pay

Soaring Luxury-Goods Prices Test Wealthy’s Will to Pay

The prices of luxury goods have escalated to levels that threaten the ability of consumers to purchase them (Kapner and Passariello). While the prices of all goods and services have increased, the increase in the prices of luxury products has gone high above inflation rates (Kapner and Passariello). The prices of luxury shoes, handbags, clothes, watches, jewelry, etc. have risen beyond the reach of many people. Consumers are no longer willing to meet the hiked prices to acquire luxury products. This escalation has put the luxury goods market at risk of losing its customers to affordable alternative products (Kapner and Passariello). This risk is highlighted by the drop in the growth rate of sales in the luxury goods market. Since the global economic recession, the sales grew by about 11% every year, but last year the growth rate dropped to 7% (Kapner and Passariello). If the downward trend continued at the same trend, the luxury market would collapse in a couple of years.
Manufacturers of luxury goods claim that the increase is a reaction to the general increase in the costs of production. They say that the prices of inputs such as raw material, machinery, staffing and training, exchange rates, etc. have gone up, and so the prices of their products had to rise too (Kapner and Passariello). The producers also claim to push up the prices of their products to maintain the quality of luxury and to distinguish them from th…