NEW YORK (Reuters) - Retailers have to adapt to the weakening economy to attract consumers who are struggling with soaring costs for food and fuel, consultants with dunnhumby said on Tuesday.
"Our view is that we are in quite a difficult consumer environment," said Martin Hayward, director of strategy and futures for dunnhumby, a London-based data analysis firm. This is in contrast to "a period of relatively easy growth in many ways" enjoyed in recent years by retailers and suppliers, he said.
As conditions get more challenging, Hayward said retailers will have a hard time "optimizing their response to these tougher conditions."
Simon Hay, chief executive of dunnhumbyUSA, said that over the past decade, consumers have come to expect quality and good service and that they would not likely compromise those values.
"I think (consumers) are looking for people to reach out to them and understand their situation, and for retailers to do something on their behalf around value, around price, to try and lessen the pain of the current economic circumstance," Hay said.
Hayward and Hay cited as an example the loyalty program used by British grocer Tesco PLC (TESO.O: Quote, Profile, Research, Stock Buzz), a client of dunnhumby and its majority owner, which rewards loyal customers monetarily.
In the United States, consumer spending has slowed as the average price of gasoline has topped $4 a gallon, the housing market has declined, food prices have jumped and jobs are uncertain. But the impact also is being felt around the world.
"When you look across the U.S. and Europe, there is absolutely a move to value going on," Hay said.
"The economic circumstances are such that consumers -- not just a group of consumers, but most consumers -- are having to change their behavior in some form," Hay said, noting that this is either "as necessity or the perception of necessity."
Meanwhile, as much as 20 percent of consumers worldwide have had to "radically change" their behavior by doing something different to cope with the harsher economic reality, Hay said, such as getting another job, perhaps.
dunnhumby helps retailers create loyalty programs that give them data about consumer shopping habits.
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(Reporting by Martinne Geller; editing by Carol Bishopric)
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