Inflation, slow demand still top concerns for retailers globally — survey

Despite initial signs that price rises are slowing, retailers globally are still worried about inflation dampening consumer spending, according to a survey of retail decision-makers conducted by Boston Consulting Group.

In Europe, retailers are contending with slowing sales as consumers, squeezed by high energy bills, spend less on clothes and buy cheaper food.

Overall the rising cost of goods, declining consumer spending, and unpredictable supply chains were the top-ranked concerns for the 561 global retail executives, directors, and managers surveyed by BCG for a report published Tuesday as the World Retail Congress conference begins.

Passing higher costs on to shoppers is likely to become harder: 72 per cent of respondents said they expected consumers to be more price-sensitive this year.

“This limits the options retailers have to recover and combat high input costs, and it creates new difficulties that retailers must combat, such as shifting consumer behaviour towards specific products and customer segments,” BCG said in the report.

When buying groceries, for example, consumers in Britain have been prioritising affordability over other qualities, with negative knock-on impacts on nutrition.

Retailers were more optimistic about North America than Europe, with 68 per cent predicting growth in the former and 54 per cent in the latter.