Young Luxury Shoppers Often Still Living With Mom and Dad

young shopper

Half of young adults are buying luxury goods because they still live rent-free with parents.

The shock findings come in a new research note from Morgan Stanley on the strength being enjoyed by the luxury retail segment, which detailed the quantity of “kids” in the United States and the United Kingdom that are still living at home.

“When young adults free up their budget for daily necessities (e.g. rent and grocery), they simply have more disposable income to be allocated to discretionary spending,” Morgan Stanley analysts said in the report.

In the U.S., 48% of those between the ages of 18 and 29 are living at home, while in the U.K., 42% of those between the ages of 15 and 34 are doing so, according to the report.

That figure for the U.S. is the highest since 1940, while that for the U.K. is the highest in the 25 years of data published by Morgan Stanley — and up from 36% in 1996, per the report.

The report attributes this trend to young people in these countries pursuing higher education, delaying getting married, wanting to save money and being unable to afford rent.

At the same time, there has been “very significant” growth in sales of luxury goods in the West over the last three to five years, the report said.

This is due in part to a broadening of the total addressable market (TAM) for these goods in the West, which includes a growing number of younger buyers — among them those living with their parents.

“This is of course not the only reason luxury goods consumers are getting younger in the West (social media playing also an important part) but we see it as fundamentally positive for the industry,” the analysts wrote.

Luxury brands have been reporting resilient sales despite the current macroeconomic headwinds.

For example, luxury retailer Hermes said Oct. 20 that it plans to raise prices next year, after reporting what it called “very good sales momentum” and continued buying power among affluent consumers.

The French retailer’s sales were up 28% in the U.S., 28% in France and 25% in the rest of Europe, according to its quarterly earnings report.

A week earlier, on Oct. 12, French luxury giant LVMH reported 19% sales growth for the quarter.

LVMH also launched its debut video clip to TikTok’s 1 billion+ active users.

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