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Chief Executive China (CEC) conducted an exclusive interview in December 2025 with Mr. Albert Chan of Coresight Research, in which he shared his insights on the latest trends in North American retail and consumer behavior.
Mr. Albert Chan is the Chief Experience Officer and Head of the Greater China and Hong Kong office at Coresight Research, a global retail research and consulting firm. He leads the company’s business development and client support in Hong Kong and across Greater China, providing consulting services to global brands in such areas as market entry, brand promotion, consumer insights, and retail technology trends.
CEC: What changes have you observed in the purchasing behaviors of consumers in Europe and the US in recent years? Which changes are a direct or indirect result of tariff conflicts?
Albert Chan (Albert): At Coresight Research, we conduct surveys of American consumers every four weeks. Over time, we have identified a trend: due to inflation and high interest rates, consumers – particularly in the US – have become price-sensitive and are becoming more cautious about their spending.
Our data shows that in today’s unpredictable economic environment, the majority of American consumers (57%) are concerned about potential price increases due to tariffs. In fact, according to reports from our clients and sales data, food prices have risen nearly 10 percentage points from July to November this year. American consumers perceive that as prices rise, the proportion of essential expenditures – like food and groceries – in their disposable income increases, forcing them to spend more to buy the same items. This consumer group is currently focused on controlling expenditures, only purchasing essentials like food and groceries while cutting back on non-essential items like clothing and electronics.
Indeed, we had already been observing this long-term trend even before the introduction of the tariff policies. The tariffs have merely accelerated this process or made the trend more evident in the short term.
CEC: How do these changes in consumer behavior affect retailers? Which retailers are most impacted?
Albert: Coresight Research's latest report shows that "the shift away from department stores" has become a norm during times of constrained spending, with shoppers turning to other retail formats. In our surveys for 2023 and 2024, we observed that inflationary pressures led to declining sales in department stores, with foot traffic shifting to other retail formats, particularly those with more attractive value propositions. We believe that each major economic shock leads to lasting changes in some consumer behaviors, which can harm department stores.
Consumers are becoming more price-sensitive, and the influence of brands may not be as strong as before. Retailers that rely heavily on low-income consumers may be the most vulnerable as consumers become more cautious. However, if retailers adopt aggressive pricing strategies that attract more high-income consumers to "trade down" during this uncertain environment, they may reverse the situation. In this context, various discount models are booming. Off-price retailers (such as TJX Companies), certain mass merchandise chains (especially Walmart), and warehouse clubs (like Costco) have proven to be long-term market share winners due to their focus on providing genuine and compelling everyday low prices.
Cross-border ecommerce platforms like Shein and Temu may face challenges. They are affected by tariffs and the removal of small-package exemptions and have warned customers of potential price increases.
However, given that all mass-market retailers will face additional tariff costs, those at the lower end of the price spectrum may still manage to maintain market pricing after raising their prices to some extent. If these cross-border platforms can maintain this relative competitiveness, we expect them to continue attracting American consumers.
CEC: Based on your observations, what methods have these retailers used to work with their Chinese suppliers to mitigate the impacts of tariff conflicts between the US and China?
Albert: Retailers have been doing one thing in recent years: they are requiring Chinese suppliers to implement a "China plus one" production strategy, where suppliers cannot rely solely on production in China but must establish production lines in another country or region – such as Southeast Asia, South America, or even locally in the US. I believe this is the most important trend.
This trend did not start with the recent increase in tariffs; it began during Trump's presidency, and the current tariff policies have only further reinforced this practice.
For Chinese suppliers, ensuring that their supply chains are resilient enough to adapt to such changes is crucial, as tariff policies are often adjusted. One day tariffs may increase by 100%, the next day decrease to 50%, and then drop to 20% – the specific changes are hard to predict. Therefore, Chinese suppliers must maintain adequate flexibility in their supply chains.
Moreover, when negotiating with US retailers, Chinese suppliers typically incorporate tariff costs directly into their pricing or raise prices in advance to create a buffer. This way, even if tariffs rise in the future, they still have room to continue doing business with US retailers.
CEC: There are also many Chinese suppliers who are choosing to shift their focus to markets outside the US, under the same retail brands, to mitigate the impact of tariffs. How do you view this trend?
Albert: Indeed, we are seeing more Chinese suppliers exploring markets in Southeast Asia and the Middle East. The reasons are twofold: first, the "Belt and Road" policy may provide them with tax benefits or government support. Second, the middle class in these markets is growing, their disposable incomes are increasing, and they are willing to pay a premium for quality products, with local consumption capacity continuously improving.
Over the past few years, Chinese products have built a good reputation for quality, especially in categories like electronics, beauty, and apparel. Therefore, consumers in emerging markets like Southeast Asia and the Middle East are increasingly willing to purchase Chinese products or brands. However, it’s worth noting that while the profit margins in these markets may be better, their overall scale remains much smaller than that of the US market.
Additionally, entering different countries in Southeast Asia requires differentiated strategies. For instance, in cosmetics or skincare, it's essential to ensure compliance with local agricultural and cultural policies – for example, in some Muslim countries, products must meet halal certification or align with Islamic cultural standards. Chinese suppliers must remain highly sensitive to these details if they want to tap into these markets.
The interview continues in Part 2.
