THE last year proved challenging after a surge in the number of retailers collapsing into administration, closing stores or cutting rents using the CVA (company voluntary arrangement) insolvency procedure. Retailers in general are under increasing pressure to understand today's global consumer, simply to ensure their survival.
DWF recently commissioned a global survey, conducted in partnership with Retail Week, of 10,000 consumers worldwide, including 1,000 in each of the UK and Ireland, to better understand the macro trends driving consumer behaviour across the world. The findings provide compelling insight into how those consumers are behaving and what retailers need to do to win their spend in 2019.
The survey revealed that the political and economic outlook in 2019 is a major concern for all consumers. And we don't have to look too far from home to see why this might be the case.
According to the research, 49 per cent of UK consumers feel negative about the Government’s handling of the Brexit negotiations which is driving down confidence. Consumers are clearly divided about what the future holds once we leave the EU in March. The youngest demographic surveyed (18- to 24-year-olds) - known to be the most pro-EU age group - are also the most negative about the UK’s prospects post Brexit.
In general terms the majority of UK consumers believe prices will go up following Brexit. This compares to the Republic of Ireland where some 24 per cent feel negatively about the handling of Brexit negotiations, while 31 per cent feel positive and 45 per cent are not sure. They are equally divided about the future of the EU following Brexit.
Across the global market, food is the area where consumers are anticipating an increase in expenditure. However, sales of general merchandise, such as greeting cards and stationery, will suffer in some markets. And according to the research, spending on home entertainment will remain more or less the same across most markets.
Not surprisingly, online continues to be the biggest growth channel for 2019 in terms of spend; ‘next day’ has become the de-facto global preference for delivery, with younger generations demanding even speedier options such as same day.
With so much international focus on the state of the environment, it is unsurprising that large numbers of consumers in each market are more concerned about the impact we are having on the planet and that this is feeding into their shopping habits, with many consumers now opting for those retailers with more ethical and sustainable practices.
In line with muted global consumer confidence, it is little surprise to see price is a significant consideration for consumers with deals and promotions resonating across markets in both grocery and non-grocery.
In the UK, for example, low price is the most important consideration. However, product quality ranks highly across a number of markets too, indicating that value retailers and those at the higher end are likely to do well, while mid-priced retailers will continue to feel the pinch.
The DWF and Retail Week Global Consumer 2019 report (which is available to view at www.dwf.law/globalconsumer) provides a comprehensive guide for retail decision makers looking to understand all of the factors at play. In turbulent times, it's vital to get the basics right.
:: Julie Galbraith (julie.galbraith@dwf.law) is partner/head of retail food and hospitality at DWF Belfast (www.dwf.law)
