"We are seeing the emergence of structual challenges in retail, the scale of which we've not seen in decades or even in our lifetimes," said Carrefour CEO José Luis Duran in his opening keynote speech. "Never before has the industry faced so many challenges at the same time."
He highlighted the return of inflation, pressure on supply of basic products and the growing costs of doing business as "structural, rather than cyclical pressures", which are creating "volatility and confusion" for retailers, suppliers and customers alike.
He pointed out that consumers are still willing to spend money on new products and services, highlighting the iPhone and Ninetndo Wii as products that have created huge global demand, but he warned that retailers will need to "mobilise all their assets", from people to suppliers, to create successful strategies.
His gloomy prognosis was backed up by Paul Charron, chairman emeritus of US retailer Liz Claiborne, who gave a downbeat assessment of the US consumer outlook. "In the past the strength of consumer spending has been enough to carry us through troubled times or at least mitigate the downside - not today," he said. "We are seeing downright pessimism, even fear, in America." He believes recovery was unlikely until the second half of 2009 at the earliest.
Ikea CEO Anders Dahlvig said his business was noticing a pronounced slowdown in its most developed markets namely the US, UK and Germany adding that this will accelerate Swedish retailer's move to expand in emerging markets.
However, he said slower times did represent an opportunity for businesses to focus back on making sure they are as efficient as possible and focus on opening the gap on competitors which may be struggling more than you.
A brighter note was provided by Dr Pei Liang of the China Chainstore and Franchise Association, who highlighted the huge opportunities for growth in China, both for international players and smaller local businesses. However, he warned that China was not immune either to rising costs of both product and staff.