Anabelle Colaco
17 Aug 2025, 20:15 GMT+10
LONDON, U.K.: For now, America's wealthier consumers appear unfazed by price increases on high-end products, from Birkenstock sandals to Bugaboo strollers, even as tariffs and economic uncertainty push brands to raise prices.
German footwear brand Birkenstock has seen "tremendously strong" demand since introducing higher prices on July 1 to offset U.S. import tariffs, CEO Oliver Reichert told analysts this week. "We saw no pushback or cancellations," he said.
The resilience mirrors trends across several premium brands. Bugaboo, the Dutch maker of strollers, high chairs, and playpens retailing for more than US$1,000, raised prices by $50 to $300 in May. "In general, we did not see any pushback," said Jeanelle Teves, Bugaboo's chief commercial officer for North America, noting retailers were "open and accepting" of the changes.
Coach handbags have also remained popular, with parent company Tapestry reporting 4.6 million new North American customers this year, many from Gen Z and millennial demographics. CEO Joanne Kuvoiserat said the brand expects to maintain profit margins despite tariff pressures. Ralph Lauren likewise raised its annual revenue forecast as shoppers snapped up items like its $398 Polo Bear sweaters. However, CEO Patrice Louvet cautioned that price sensitivity in the second half remains a key unknown.
Bank of America data supports the picture of steady luxury spending. The bank reported that middle—and upper-income cardholders spent more in July than a year earlier, even as spending by lower-income customers stayed flat. The bank noted that lower-income households account for only 15 percent of U.S. consumer spending, meaning overall demand could remain strong if higher-income spending holds up.
However, some signs of caution are emerging. Procter & Gamble, maker of Tide detergent, noted that even wealthier consumers are becoming more selective in their purchases.
Bugaboo manufactures in China and sells through retailers including Target, Nordstrom, and Bloomingdale's, as well as smaller independent stores. Coach's popular Tabby shoulder bag sells for $350, while Ralph Lauren's luxury apparel continues to command high prices.
As brands watch the second half of the year unfold, the big question remains whether affluent shoppers will keep absorbing price hikes or begin to pull back in the face of a "broader pricing environment," Louvet said.
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