Retail & Consumer CEOs Will Tap COVID Playbooks to Navigate Uncertainty: Report
Even as they keep a close eye on geopolitical conflicts and volatile global economies, industry leaders are confident that the lessons they learned navigating the COVID-19 pandemic will help them weather whatever comes next.
That’s according to KPMG International’s Consumer and Retail CEO Outlook report, which surveyed 120 global leaders in the sector. Within this, 82% feel confident about their company’s growth prospects, up 5% from last year, even though their views on the likelihood of general economic growth have dropped precipitously from 75% in 2023 to 59% this year.
Consumer and retail CEOs were overall more bullish on their own business than the rest of the economy, with 76% being optimistic about the sector compared to 81% last year.
Economic uncertainty is top of mind for 58% of the CEOs surveyed, with 81% expecting the cost of living crisis could impact their organizations in the next three years. During that time frame, 74% predicted their businesses could be impacted by changes in trade regulation and 72% were concerned about the fallout from geopolitical conflicts.
COVID-19 exposed the fragility of the global supply chain and global conflicts could cause further disruption to trade routes and make logistics more unpredictable and expensive.
“Every conversation I have had with clients recently starts with the same pressing topic: geopolitics,” KPMG International global head of consumer and retail Isabelle Allen said in the report. “Its presence in the boardroom is more prominent than ever before, and for consumer and retail businesses, the stakes are particularly high.”
She added: “These businesses face the dual challenge of navigating a world being shaped by global forces, all while operating on the front lines of a deeply polarized consumer base, where taking a stance on societal issues is no longer optional — it’s an expectation.”
Generative AI and Automation
The third biggest concern was the race to embrace generative AI. Grocery retail is a low margin business and implementing new technology can provide an edge over the competition if done right. CEOs want to ensure they actually see a return on investment and only about 67% are confident that they’ll get that from Gen AI in the next five years.
At the same time, 61% are concerned about addressing the ethical challenges of adopting the technology, more than the 48% who are primarily worried about the cost of implementation.
While employees fear they will lose their jobs due to automation, 82% of CEOs said that Gen AI wouldn’t impact their staffing numbers and 95% of CEOs said they plan to increase headcount over the next three years. Instead, business leaders want to train their existing employees to leverage the benefits of the technology. The top areas where companies are seeing benefits from AI are marketing and product recommendations, followed by demand forecasting and supply chain management.
“[Consumer and retail] CEOs are navigating a complex landscape, but their confidence in the industry's future is encouraging,” noted Allen. “They're embracing Gen AI as a powerful tool for growth, but they're doing so responsibly, recognizing the need for ethical guidelines and regulation.”
Eleven key industry sectors were included within the full study: asset management, automotive, banking, consumer and retail, energy, infrastructure, insurance, life sciences, manufacturing, technology, and telecommunications. There were 1,325 CEOs surveyed from July 25 through Aug. 29, 2024.
