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For the world's retailers, and especially those with sales principally in developed economies, this environment is challenging, to say the least. High food and energy prices have caused consumers to shift away from non-food and non-fuel products. Declining house prices in some markets, particularly the United States, have led to a negative wealth effect. Consumer spending on durable products has, consequently, been very weak. To the extent that spending is growing at all, consumers are becoming more price sensitive, favoring discounters over high-priced stores. Finally, weak credit market conditions have made it difficult for retailers to finance mergers and acquisitions. This means that some weak retailers may simply perish instead of being acquired.
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