What: The World Retail Congress met to take stock of the pandemic and its accelerated change on retail development around the world with the Russian-Ukrainian war as a new rattling force on business stability.

Why it is important: Industry leaders from around the world met to discuss the challenges they have been facing which include inflation, market volatility, job vacancies, a more discerning customer, energy prices and cost-of-living pressures, among more individual concerns that vary from region to region.

China’s economic health has been declining. E-commerce is experiencing a slowdown which has illuminated new shopping trends by wallet-conscious Chinese shoppers who are focusing on niche- and need-based shopping like pet care, collectables, outdoor and active gear, frozen food and ready-made meals. Covid restrictions still threaten offline retail and consumers continue to slow their in-store shopping.

French retail is facing a crisis of retail and logistical job vacancies along with increased consumer expectations for digital and CSR. Of all the European countries, France is doing relatively well and is pursuing a long-term strategy of investing in data and merchandise flows.

Retailers in Germany are suffering tremendously from inflation due to middle-class erosion that will have lasting effects on the country’s businesses. The sentiment of the German retail expert appears to be that the world will become less global, less stable and less predictable with more frequent disruptive events. Adaptability and providing essential and value-driven offers will be of the utmost importance. Understanding the consumer will be the key driver to competing in the new landscape.

The Italian retail expert provided recommendations for retailers to reduce energy consumption across the chain as a 360° cost-cutting exercise. Other advice centres around pulling in long-distance sourcing and considering wage increases when setting prices, especially in low-earning categories.

The CEO of the British Retail Consortium highlighted the shrinking basket size of consumers due to the cost-of-living crisis. Balancing the bottom lines is increasingly difficult as retailers are squeezed between higher costs in the supply chain and lower consumer demand. With changes in the government, consumers and retailers are both looking at policymakers to offer solutions.

For the US, consumers have cut back on spending at price-conscious retailers showing signs of caution that has also been creeping up to higher income groups. Input costs have eased from unwinding gas prices and shipping costs falling back. Labour cost pressures are set to be persistent. Retailers have been looking to avoid supply chain issues by bringing in inventory earlier; however, with demand dropping, many have likely over-ordered. An emphasis was placed on understanding the consumer to remain competitive, reiterating the German market-based sentiment.

Japan is facing a weak currency, rising logistics costs and supply chain disruptions which is making it a challenge to keep local customers from switching to global brands. Retailers are proactively adapting their distribution models and having a wider spectrum of affordability in the brand mix.

Falabella retail shared its struggles with currency volatility and its private-label supply chain management. Ultimately the private label being imported from China and required to be purchased in advance makes costs and prices across the group unstable, especially during this challenging recession in Chile. Despite having decent e-commerce performance, adapting to the online-offline mix has also posed a challenge for the group.

Spain is looking to the positives such as value offers, new product ranges, brand storytelling and sustainability to shape both a short- and long-term vision.

Retail responds to worldwide crisis