People shop in a store in Pennsylvania, US. File

Europe's cost of living crisis has benefited discount retailers but mid-market names are being squeezed as shoppers watch their spending, executives and analysts at an industry conference said.

Luxury is also continuing to perform well, with hopes that China's reopening will give fresh impetus as a months-long post-pandemic splurge by Americans starts to end.

But "if you are not really offering the best price, and you are not luxury, then it is difficult," Thomas Harms, global retail leader at consultancy EY, said on the sidelines of the World Retail Congress in Barcelona.

Although price rises are slowing, retailers globally are still worried inflation will dampen consumer spending and are looking for new ways to attract customers. In Europe especially, some have seen sales slow as high energy bills lead customers to buy less or cheaper food and clothes.

The rising cost of goods, declining consumer demand and unpredictable supply chains were the top concerns among retail executives and managers in a survey by Boston Consulting Group published on Tuesday.

And passing higher costs on to shoppers is likely to become harder: 72 per cent of respondents said they expected consumers to be more price-sensitive this year.

That benefits companies like Dutch non-food discounter Action, which opened 280 stores in 10 countries across Europe last year, and added its first branch in Slovakia this year, CEO Hajir Hajji told conference delegates.

Mostly buoyant results from big global companies like Nestle showed consumers were still spending despite higher prices, although several warned sales could be pinched in coming quarters if inflation does not abate.

Outside the discount space, retailers are getting creative to keep shoppers coming back, with many investing in loyalty programmes, price promotions, and improvements to the online customer experience, the BCG survey found.

Asia was a bright spot in terms of retailers' expectations, with 76 per cent of survey respondents expecting the region's economy to grow this year after China's reopening following lengthy COVID-19 lockdowns.

"It's a very positive moment," said Ying Xu, president of Chinese supermarket chain Wumart, referring to the reopening. "It takes a bit of time, but the direction is correct."

Lane Crawford Joyce Group, which runs luxury department stores in Shanghai, Beijing, Chengdu, and Hong Kong, has seen a trend of "revenge travel" since the reopening and expects a full second-half comeback in the Chinese market, CEO Jennifer Woo told Reuters.

Meanwhile Carrefour, Europe's largest food retailer, said it was confident of more profit and cash flow growth this year despite high inflation, after sales growth accelerated in the first quarter.

Sales reached 22.071 billion euros ($24.24 billion), marking like-for-like growth of 12.3 per cent and an acceleration from 10.9 per cent sales growth in the fourth quarter of 2022.

This was driven by a solid performance in France, where Carrefour hypermarkets' low-cost offering attracted buyers grappling with the cost of living. Carrefour confirmed its financial targets for 2023, which are for further growth across its main three indicators - earnings before interest, taxes, depreciation and amortisation (EBITDA), recurring operating income and net free cash flow.

"In a context of very high food inflation in most of its markets, Carrefour is staying the course and maintaining strong commercial momentum, with steady market share performance in all its key countries," Chairman and CEO Alexandre Bompard said in a statement.

As inflation drives shoppers to trade down, Carrefour said it benefited from its focus on private labels, which make up 35% of sales, as well as promotions and accelerated expansion of discount stores and cost savings.

In the company's core French market, hypermarket sales rose 6 per cent in the first quarter 2023 compared with a 3.7% rise in the fourth quarter 2022.

In Brazil, the group's second-largest market, the integration of the acquisition of Grupo BIG continued at a steady pace with 23 additional store conversions in the first quarter.

All conversions will be completed in the second quarter, six months earlier than planned, it said. Carrefour also said it had initiated its 800 million euros share buyback plan, with 200 million euros completed to date.