Yahoo Movies Retail Outlook: Heavy Headwinds Ahead
In the latest report from Coresight Research, Deborah Weinswig, chief executive officer and founder, is blunt about what 2023 has in store for retailers: the post-COVID-19 recovery was short-lived; the “roaring ’20s” never got off the ground, and the macroeconomic headwinds of 2022 will carry over into next year.
But there are nuggets of good news in her 30-page multisector analysis, which is titled “Retail 2023 Retail and Technology Outlook: Facing the Headwinds.”
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For example, for the global luxury sector, Weinswig noted that the U.S. market “is a bright spot for luxury companies due to its large population of affluent consumers and familiarity with renowned luxury brands.” Weinswig noted that as China’s stance loosens toward COVID-19 control “and it relaxes restrictions through 2023 (especially for international travelers), we expect a rebound in consumption from the region.”
And with the Asian and U.S. luxury markets continuing to be locally driven, Weinswig said, “luxury growth in Europe will increasingly depend on domestic consumers and moderate in the medium term.”
In an overview of the U.S. market, Weinswig said higher interest rates, inflation, higher food and energy costs and expectations of a recession have battered consumer confidence. “High borrowing costs have squeezed household spending,” Weinswig said in the report. “The low-income-group households have faced limitations in discretionary spending due to the high prices of essentials as well as declining savings and contribution to higher credit card debt.”
And while spending, in nominal terms, was resilient this year, Weinswig said in real terms, “shoppers have been cutting spending on big-ticket categories such as furniture, household appliances and home-improvement products, as well as groceries (as of the third quarter of 2022).”
“As we head to 2023, the U.S. economy is giving mixed signals for recession, but households are struggling under the burden of high prices,” the report stated. “High prices, high input costs and a shortage of labor and raw materials could lead to a new dynamic of insufficiency of supply. Such a sentiment might prove unsettling for businesses, and supply-side stimulus might be required in the months ahead.”
Weinswig said it’s time for retailers to batten down the hatches.
