The argument that the market for luxury goods are on the decline and that retailers should shift their focus to essential items is flawed for a myriad of reasons, the argument is not entirely logical when we consider some critical assumptions such as the linkage between higher unemployment rate and purchase of luxury goods, the relevance of consumer fears and try to answer the question if luxury goods are non-essential items.
The argument assumes that higher unemployment rate means less people can afford to buy luxury goods, this line of reasoning is flawed because from historic data, we cannot find a correlation between purchase of luxury goods and unemployment data. Luxury goods like designer clothing, jewellery and other luxury servises are not primarily patronised by people who need basic employment for sustenance, and because of this, their patronage does not fluctuate with the mood of the unemployment data.
The argument further assumes that coonsumer fears to purchase luxury goods perhaps due to instability in the economy. Consumer fears have never indicated patronage to luxury goods, this has purely been an indicatior of the essential preferences of the average consumer, the argument fails to realize that the customer of the luxury goods are not affected by this data but are even further fueled by these types of data to buy more luxury goods with the hope that the values of these goods will increase with worsening economic situation.
Finally the argument emphasises that luxury goods are non-essential items, this is a flawed position since it fails to note that luxury goods cater to special needs of the ultra-rich who actually patronises them. These set of the populace needs this part of the economy to solidify their status and will continue their patronage irrespective of the economic situation.
In conclusion, we have seen that the argument is flawed because it’s assumptions are unfounded when we take a critical analysis of the situation.However this argument would have been strengthened if it had given proff that the patronage of luxury goods are these formerly-employed people who are now being rendered unemployed due to the worsening economic situation.