Reuters Summit-You may never have it so good again, execs say

(For other news from the Reuters Global Retail Summit, click here)

(For other news from the Reuters Global Luxury Summit, click here)

By Mark Potter

LONDON, June 12 (Reuters) - You've "never had it so good," British Prime Minister Harold Macmillan told the first generation of mass-market consumers in 1957.

"You may never have it so good again," appeared to be the message of many of executives and analysts at the Reuters luxury goods and retail summits this week.

Conspicuous consumption has been dealt a mortal blow by an unprecedented global economic downturn, and is being replaced by caution and thrift, with consumers also planning to spend more time at home and anxious to protect the environment, they said.

"There is a change in the zeitgeist," said Ian Cheshire, chief executive of Kingfisher (KGF.L), Europe's biggest home improvements retailer. "There is almost a theoretical rejection of flat-out consumerism and I think that's related to the loss of confidence with markets."

In business terms, this means consumer spending could take years to recover to pre-recession levels, even when economic growth picks up.

"They were unprecedented times," said Pippa Wicks, a retail turnaround specialist at consultants AlixPartners, of the credit boom years of earlier this decade. [ID:nLA1007237]

"2007 (spending) levels were a historic high."

William McComb, chief executive of U.S. fashion company Liz Claiborne (LIZ.N), said retailers need to adjust to the "new normal" of lower demand and shoppers focused more on what they can get for their money than what they can afford to spend. [ID:nN10450912]

This may involve selling more affordable goods, as U.S. cosmetics group Estee Lauder (EL.N) said it was planning to do for the year-end holiday season. [ID:nN09368171]

It may also involve managing stocks more tightly in a bid to wean consumers off the heavy discounting to which they have become accustomed as retailers have rushed to cut inventories.

This could be a challenge. U.S. jeweller Tiffany (TIF.N) said it was having to deal with a growing number of customers trying to haggle down prices. [ID:nN10466655]

Luxury brands in particular will have to work harder to justify their premium prices.