Retailers should keep their nerve and prepare for new opportunities in the global market, as leading economists predict the first signs of economic recovery by the end of this year.
These were some the messages from the opening plenary session of the 2009 World Retail Congress, which was held in Barcelona last week.
Dr Ira Kalish, director of Global Research with Deloitte said that global recovery would depend on the US and China and that we could see the first signs of an upturn in the US economy by the end of this year or in early 2010. He said that despite continued downtown in the US, fiscal and monetary stimuli were helping and added that consumer spending was holding up well in China, as the rise in jobless was largely among lower earners rather than the more affluent middle classes.
Echoing the view that the start of recovery may only be months away, Ajay Kapur, chief global and Asia strategy with Mirae Asset, highlighted three key trends that would influence the global economy in future: a shift from wealth-driven economies to more middle-income spending; a swing from export to domestic consumption in emerging markets, and a reduction in violence in the Middle East reflecting a reduction in the numbers of disaffected youth.
But government’s measures to minimise the impact of the financial crisis on their economies could lead to a new era of protectionism, warned Dr William Fung, managing director of Li & Fung, a global sourcing company.
Fung expressed concern that we may see a fundamental change in attitudes to international trade that could result in the type of trade barriers that emerged in the wake of the Wall Street crash.
“We must be careful that history does not repeat itself,” said Fung.
Jerry Storch, chairman and CEO of Toys R Us, said retailers should stick to what they do best and avoid the temptation of knee-jerk responses to recessionary conditions, like value offers.
“Do what you do that’s better than the others. Don’t try to be someone else.  Strategies must be company specific,” he said.
Fellow retailer Richard Simonin, CEO of Etam, highlighted two major challenges to retailers in the post-crisis economy: ensuring that marketing responded to changes in consumer mentality; and maintaining strong staff leadership in a market where the future is uncertain.