Consumer & retail CEOs more upbeat about their co prospects than economy

Bengaluru: While more than three fourth (82 per cent) of consumer and retail (C&R) chief executive officers (CEOs) are confident about their company’s growth prospects in the upcoming year. However, only 59 per cent are optimistic about economic growth, making them the least hopeful among all the industries surveyed. 

The top brass of the 120 sector leaders globally have attributed economic uncertainty, geopolitical complexities, and the adoption of generative artificial intelligence (Gen AI) as the headwinds for growth. 

However, 87 per cent of C&R CEOs expect modest earnings growth — up 14 percentage points from 2023. This is higher than the cross-industry average (76 per cent).

They also highlighted supply chain and geopolitics and political uncertainty as the top threats to their organisations’ growth over the next three years.

“CEOs in the consumer and retail sector need to navigate multiple areas including driving growth in a time when spending capacity is muted and competition is more, managing profitability in a generally inflationary environment and complying with increasing regulation,” said Nikhil Sethi, Partner and Head, Consumer Goods, KPMG in India. 

About 61 per cent organisations identified ethical challenges as some of the most difficult issues to address when implementing AI within their businesses, demanding a need for robust regulation, with the majority (84 per cent — the highest of all sectors) stating that a degree of regulation regarding Gen AI should mirror that of climate commitments.

“As GenAI increasingly takes centre stage for investment in helping retailers know their customers better and have a stronger control on their inventories, retailers need to prioritise their investments towards making strategic decisions,” said Puneet Mansukhani, Partner - Digital Advisory and Retail sector head, KPMG, India.