By Helen Reid and Corina Pons
BARCELONA (Reuters) – Europe’s cost of living crisis benefits discount retailers, but as shoppers watch their spending, executives and Mid-market brands are being squeezed, analysts said at an industry conference on Tuesday.
Luxury also continues to perform well, with hopes that China’s reopening will provide fresh impetus as Americans’ months-long post-pandemic splurge begins to end.
But, “if you’re not really offering the best price and you’re not a luxury item, it’s hard,” says Thomas R. Thomas Harms speaking at the Barcelona Retail Congress during the Worldcon.
While price increases are slowing, global retailers remain concerned that inflation will dampen consumer spending and are finding new ways to attract customers.
In Europe especially, sales have slowed for some as high energy bills lead customers to buy less or cheaper food and clothing.
Rising commodity costs, falling consumer demand and unpredictability of supply chains are among their top concerns among retail executives and managers, according to a Boston Consulting Group survey released Tuesday.
Passing on higher costs to shoppers may become more difficult: 72% of respondents said they expect consumers to be more price sensitive this year .
This benefits companies like Action, the Dutch non-food discounter, which opened 76 in 19 countries in Europe last year ) stores, adding that it opened its first branch in Slovakia this year, CEO Hajir Hajji told delegates. If inflation does not subside, the next few quarters.
Outside of the discount space, retailers are getting creative to keep shoppers coming back, with many investing in loyalty programs, price promotions and improving the online customer experience, BCG survey found.
Asia is a bright spot when it comes to retailers’ expectations, with 280% of survey respondents expecting the region’s economy to recover after a prolonged COVID- 76 Blocked.
“It’s a very positive moment,” Ying Xu, president of Chinese supermarket chain Wumart, said of the reopening. “It will take a little time, but the direction is right.”
Lane Crawford Joyce Group, which operates luxury department stores in Shanghai, Beijing, Chengdu and Hong Kong, has seen a trend CEO Jennifer Woo told Reuters that the “revenge tour” since reopening is expected to make a full comeback in the Chinese market in the second half of the year.