Main Streets across the World 2023

MAIN STREETS ACROSS THE WORLD 2023 | 29

GLOBAL TRENDS AND INSIGHTS 03

Against this backdrop, the retail sector has shown surprising resilience as expenditure, albeit volatile on a month-to-month basis, has largely continued to record positive, although weak, growth. Spending patterns, however, are changing. With the largest pullback seen in discretionary expenditure, households are focusing on essential items such as food, rent/mortgage and utilities. Notwithstanding this wider trend, historical evidence shows that the luxury sector performs comparatively well during economic downtowns as luxury shoppers are more immune to rising living costs.

In some markets, such as Japan, affluent consumers are turning to luxury brands as alternative forms of investment given weak returns in more traditional asset classes. Together, these factors imply a “K-shaped” outlook, with luxury and value retail offerings expected to continue growing over the near-term, while the middle, discretionary retail, is expected to enter a period of decline.

CUSHMAN & WAKEFIELD