The Closing Funnel

Economic turning points are usually named only once they are visible in conventional macroeconomic indicators. Household and corporate behaviour, however, can change much earlier. From this perspective, the most sensitive expenditures are those that can easily be postponed: the third holiday, a five-star hotel, an expensive restaurant, the next luxury product or replacing a premium car. Cutting back on them does not necessarily mean becoming poorer. It can also signal that a household has become more cautious in how it assesses its own wealth trajectory.

Over recent decades, the luxury market expanded visibly downward. BCG and Altagamma describe this as the democratization of luxury: in 2013, aspirational consumers already accounted for more than 74 percent of the value of the high-end market. According to Bain–Altagamma, the global buyer base for personal luxury goods was around 330 million people in 2014, rising to roughly 390 million by 2019 and 400 million by 2022. The market therefore expanded not only because the same upper tier spent more, but also because tens of millions of new buyers entered.

The exact wealth threshold cannot be mapped directly onto luxury-industry categories because those categories classify consumers by spending rather than net wealth. Based on the available data, however, it is plausible that regular premium and luxury consumption extended from a previously much narrower upper tier down into part of the top twenty percent. The analysis therefore treats roughly the P80–P97 range as the relevant area, not as an exact boundary but as an indication that a substantial social group is involved.

After 2022, this funnel appears to have begun closing again. According to Bain–Altagamma, the number of luxury consumers fell from roughly 400 million in 2022 to around 350 million in 2024 and 340 million in 2025. The market weight of aspirational consumers fell to 61 percent by 2025, and a significant share reduced or completely suspended luxury spending. At the same time, the share of the upper, high-spending customer group increased. Luxury is not disappearing: the market is concentrating upward again.

Corporate revenue can conceal this for a time. With fewer customers, the same or even greater revenue can be achieved if average prices and spending per buyer increase, or if higher-spending consumers account for a larger share. Higher prices, moreover, are not necessarily merely compensation for lost volume. They can themselves become an instrument of the narrowing process: the luxury market may give up part of the customer base it had previously expanded downward to reach, and reposition itself toward less price-sensitive, ultra-wealthy consumers. Rising average prices, a narrower buyer base and lower capacity utilization can therefore be parts of the same structural change.

The distribution of wealth helps explain why this may matter at the macroeconomic level. According to the ECB, at the end of 2025 the wealthiest ten percent in the euro area owned 57.22 percent of household net wealth, while the top five percent held 44.46 percent. The group above P90 is not homogeneous: as we move upward, business and financial wealth carry increasing weight, while further down real estate and deposits are more important. Consumption by the ultra-wealthy at the very top therefore follows a different logic from that of the broader upper group that can afford luxury but still weighs its cost.

This is where the distinction between nominal and real wealth becomes important. A household’s nominal wealth can remain high while its actual purchasing power grows more slowly. According to the ECB’s aggregate data, the trajectory of household real wealth broke in 2022: net wealth continued to rise in nominal terms but fell in real terms, then returned close to its pre-pandemic level in 2023. In the ECB’s interpretation, this itself raised the propensity to save. A household may therefore save more not necessarily because it is in difficulty, but because it is trying to replace through active saving part of the passive wealth gains that had previously come from rising asset prices.

This mechanism may explain why discretionary consumption changes first. If someone who previously travelled three times a year at the high end now travels once, they still appear in tourism statistics. If they buy one premium product instead of three, they may still remain a customer of the same brand. Because of higher prices and shifts in the customer mix, the nominal market value can meanwhile look much more stable than the underlying number of buyers and their purchase frequency.

The process can become a broader macroeconomic issue if less frequent consumption persists. At first, companies can adapt through higher prices, a better customer mix or a stronger focus on high-spending buyers. Later, however, they may also reduce inventory, procurement, investment and outsourced services. At that point, what began as a voluntary consumer adjustment appears in suppliers’ revenues, working hours and investment, and then feeds back into households.

The closing-funnel hypothesis is therefore not a claim of an approaching collapse. It suggests that the first sign of a cyclical turning point may be far subtler: not that someone can no longer go on holiday, but that they go once instead of three times; not that they cannot buy a car, but that they replace it later; not that they are running down their wealth, but that they once again place greater importance on actively building it. If this is indeed happening across a broad social group, then the macroeconomic turning point first appears not in constraint, but in a changed use of freedom of choice.

The purpose of Unus Multorum is not to tell readers what to think about a particular event. Its purpose is to reveal the connections that allow every reader to form their own conclusions.