What: Coresight reviews the reasons why the horizon is not bright for mass-market retailers.

Why it is important: Department Stores should take notice and focus on two parallel strategies, the first one being to nurture luxury and less price-conscious customers, and the second one being to review the assortment for the most price-conscious ones, in order to compensate by volumes the margin that will not be achieved otherwise.

Deborah Weinswig, the editor in chief of Coresight, reviews the current situation in the US, as most retailers have noted that customers passed up higher-margin and big-ticket items (home furnishing, apparel) in favor of essential or low-margin items (groceries, beauty). This is mainly due to the rising inflation and affecting mostly low and modest incomes, as luxury retailers (Nordstrom) appear to be unaffected so far.

On a worldwide basis, the situation in China is complicated as retail has been hit by the Covid lockdowns in Beijing and Shanghai, and this adds up to the renewal of trade barriers and fears of a global food shortage.

As a consequence, Weinswig expects that mass-market retailers might keep on suffering for the next year or so.

The current market might favour smaller tickets and margin products